Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________________________ Form 10-K ______________________________________________ ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-35006 ______________________________________________ SPECTRUM PHARMACEUTICALS, INC. (Exact Name of Registrant as Specified in its Charter) ______________________________________________ Delaware 93-0979187 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) Pilot House - Lewis Wharf, 2 Atlantic Ave, 6th Floor Boston, Massachusetts 02110 (Address of principal executive offices) (617) 586-3900 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.001 par value SPPI The NASDAQ Global Select Market Securities registered pursuant to Section 12(g) of the Act: None ______________________________________________ Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.☐ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒ As of June 30, 2022, the aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was $115.4 million (based upon the $0.78 per share closing sale price for shares of the registrant’s Common Stock as reported by the NASDAQ Global Select Market on June 30, 2022, the last trading date of the registrant’s most recently completed second fiscal quarter). As of March 22, 2023, approximately 205,301,402 shares of the registrant’s Common Stock, $0.001 par value, were outstanding. DOCUMENTS INCORPORATED BY REFERENCE Certain information required by Parts II and III are omitted from this Annual Report on Form 10-K and incorporated by reference to our definitive proxy statement for our 2023 annual meeting of shareholders (“2023 Proxy Statement”), to be filed pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended, or the Exchange Act. If our 2023 Proxy Statement is not filed within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, the omitted information will be included in an amendment to this Annual Report on Form 10-K filed not later than the end of such 120-day period. Table of Contents TABLE OF CONTENTS Page PART I Item 1. Business 2 Item 1A. Risk Factors 22 Item 1B. Unresolved Staff Comments 58 Item 2. Properties 58 Item 3. Legal Proceedings 58 Item 4. Mine Safety Disclosures 58 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 58 Item 6. Reserved 59 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 59 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 67 Item 8. Financial Statements and Supplementary Data F-1 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 68 Item 9A. Controls and Procedures 68 Item 9B. Other Information 69 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 69 PART III Item 10. Directors, Executive Officers and Corporate Governance 69 Item 11. Executive Compensation 69 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 69 Item 13. Certain Relationships and Related Transactions, and Director Independence 69 Item 14. Principal Accountant Fees and Services 69 PART IV Item 15. Exhibits and Financial Statement Schedules 70 Item 16. Form 10-K Summary 74 Signatures 75 Table of Contents Cautionary Note Concerning Forward-Looking Statements This Annual Report on Form 10-K (“Annual Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, statements regarding our future product development and the commercialization activities and costs of our future products and current product, the revenue potential (licensing, royalty and sales) of our product and product candidates, the impact of the COVID-19 pandemic or new variants thereof on our business, the success, safety and efficacy of our drug products, revenues and revenue assumptions, clinical studies, including designs and implementation, development and commercialization timelines, product acquisitions, accounting principles, litigation expenses, liquidity and capital resources and trends, and other statements containing forward-looking words, such as, “believes,” “may,” “could,” “would,” “will,” “expects,” “intends,” “estimates,” “anticipates,” “plans,” “seeks,” “continues,” or the negative thereof or variation thereon or similar terminology (although not all forward-looking statements contain these words). Such forward-looking statements, including statements that “we believe” or similar statements, are based on the reasonable beliefs of our management as well as assumptions made by and information currently available to our management. All forward-looking statements included in this Annual Report speak only as of the date of this Annual Report and readers should not put undue reliance on these forward-looking statements. Forward- looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified; therefore, our actual results may differ materially from those described in any forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed elsewhere in this Annual Report, and the following factors, among others: • our ability to successfully develop, obtain regulatory approval, and market our product and product candidates; • the commercial success and the degree of market acceptance of our product; • the approval, or timing of approval, of our products or new indications for our products by the U.S. Food and Drug Administration (the “FDA”) and other international regulatory agencies; • the overall impact of COVID-19 on our business, including, without limitation, delays caused by COVID-19 related travel restrictions and potential disruptions to manufacturing, supply chain, and clinical development activities; • actions by the FDA and other regulatory agencies, including international agencies; • the timing and/or results of pending or future clinical trials, and our reliance on contract research organizations (“CROs”); • our ability to maintain sufficient cash resources to fund our business operations; • our history of net losses; • estimates regarding future results of operations, financial position, research and development costs, capital requirements and our needs for additional financing; • our ability to enter into strategic alliances with partners for manufacturing, development and commercialization; • our competitors’ progress with their drug development programs, which could adversely impact the perceived or actual value of our in- development drugs; • our ability to achieve and maintain adequate levels of coverage or reimbursement from third parties for our current product and any future products we may seek to commercialize; • the size of the markets for our current and future products; • our dependence on the production capabilities of contract manufacturing organizations (“CMOs”) and other third-parties for active pharmaceutical ingredients (“APIs”), drug products, related supplies and logistical services; • the ability of our manufacturing partners to meet our product demands and timelines; • our ability to identify and acquire new product candidates and to successfully integrate those product candidates into our operations; • our ability to protect our intellectual property rights; • the impact of legislative or regulatory reform on the pricing for pharmaceutical products; • the impact of any litigation to which we are, or may become, a party; 1 Table of Contents • the volatility of capital markets and other adverse macroeconomic factors, including due to inflationary pressures, interest rate increases, economic slowdown or recession, banking stability, geopolitical tensions or the outbreak of hostilities or war; • our ability to regain compliance with the requirements of the NASDAQ Stock Market for continued listing; • our ability, and that of our suppliers, development partners, and manufacturing partners, to comply with laws, regulations and standards that govern or affect the pharmaceutical and biotechnology industries; • our ability to maintain the services of our key executives and other personnel; and • other risks and uncertainties, including those listed under the caption “Risk Factors” in this Annual Report and the other documents we file with the Securities and Exchange Commission (the “SEC”). All subsequent written and oral forward-looking statements attributable to us or by persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. We expressly disclaim any intent or obligation to update information contained in any forward-looking statement after the date thereof to conform such information to actual results or to changes in our opinions or expectations. In addition, past financial or operating performance is not necessarily a reliable indicator of future performance, and you should not use our historical performance to anticipate results or future period trends. We can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition. Except as required by law, we do not undertake to update any such forward-looking statements and expressly disclaim any duty to update the information contained in this Annual Report. Unless the context otherwise requires, all references in this Annual Report to the “Company”, “we,” “us,” “our,” “Spectrum” and “Spectrum Pharmaceuticals” refer to Spectrum Pharmaceuticals, Inc. and its subsidiaries and other consolidated entities, as a consolidated entity. We primarily conduct our business activities as Spectrum Pharmaceuticals. *** SPECTRUM PHARMACEUTICALS, INC. ® is a registered trademark of Spectrum Pharmaceuticals, Inc. and its affiliates. REDEFINING CANCER CARE™, ROLVEDON™ and the Spectrum Pharmaceuticals’ logos are trademarks owned by Spectrum Pharmaceuticals, Inc. Any other trademarks are the property of their respective owners. We use ROLVEDON and other marks as trademarks in the United States and/or in other countries. This Annual Report contains references to our trademarks and service marks and to those belonging to other entities. Solely for convenience, trademarks and trade names referred to in this report, including logos, artwork and other visual displays, may appear without the ® or TM symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other entities’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other entity. PART I Item 1. Business Company Overview Spectrum Pharmaceuticals, Inc. (“Spectrum,” the “Company,” “we,” “our,” or “us”) is a commercial-stage biopharmaceutical company, with a strategy of acquiring, developing, and commercializing novel and targeted oncology therapies. We have an in-house clinical development organization with regulatory and data management capabilities, in addition to commercial infrastructure and a field based sales force for our marketed product, ROLVEDON™ (eflapegrastim). We have one commercial asset and one drug candidate in late-stage development: • ROLVEDON™ is a novel long-acting granulocyte colony-stimulating factor (“G-CSF”) for the treatment of chemotherapy-induced neutropenia. On April 11, 2022, we announced that we had received notice that the resubmission of our Biologics License Application (“BLA”) for ROLVEDON had been accepted for filing and received a Prescription Drug User Fee Act (“PDUFA”) date of September 9, 2022. On September 9, 2022, we received 2 Table of Contents the U.S. Food and Drug Administration’s (“FDA”) marketing approval for ROLVEDON and began commercialization activities in the fourth quarter of 2022; and • Poziotinib is a novel irreversible tyrosine kinase inhibitor (“TKI”) under investigation for non-small cell lung cancer (“NSCLC”) tumors with various mutations. On December 6, 2021, we announced we submitted our New Drug Application (“NDA”) for poziotinib to the FDA for use in patients with previously treated locally advanced or metastatic NSCLC with HER2 exon 20 insertion mutations. The NDA submission was based on the positive results of Cohort 2 from the ZENITH20 clinical trial, which assessed the safety and efficacy of poziotinib. The product candidate received fast track designation from the FDA and there is currently no treatment specifically approved by the FDA for this indication. On February 11, 2022, we announced that we received notice from the FDA that the NDA had been accepted for filing and received a PDUFA action date of November 24, 2022. On September 22, 2022, we met with the FDA’s Oncologic Drugs Advisory Committee (“ODAC”). The ODAC voted 9 (no) - 4 (yes) that the current benefits of poziotinib did not outweigh its risks for the treatment of patients with NSCLC with HER2 exon 20 insertion mutations. On November 25, 2022, we announced that we had received a Complete Response Letter (“CRL”) from the FDA regarding our NDA. The CRL stated that the FDA determined that it could not approve the NDA in its present form and provided recommendations needed for resubmission, including generating additional data from a randomized controlled study prior to approval. We are continuing to evaluate these recommendations but we have de-prioritized further poziotinib development activities. Cancer Background and Market Size Cancer is a group of diseases characterized by the uncontrolled growth and spread of abnormal cells, which can result in death. The development of cancer is multi-factorial and includes both external factors (tobacco, infectious organisms, chemicals, and radiation) and internal factors (inherited mutations, hormones, immune conditions, and mutations that occur from exposure to environmental factors or errors in making DNA (deoxyribonucleic acid) during normal cell division). These causal factors may act together or in sequence to initiate or promote the development of cancer. Ten or more years often pass between exposure to these factors and the development of detectable cancer. Cancer is treated through surgery, radiation, chemotherapy, hormone therapy, immunotherapy, and/or targeted drug therapy. According to the American Cancer Society’s publication Cancer Facts & Figures 2022, cancer is the second leading cause of death in the U.S. (only behind heart disease). In the U.S., approximately 1.9 million new cancer cases are expected to be diagnosed in 2022 and approximately 609,360 persons were expected to die from the disease. Anyone can develop cancer. Since the risk of being diagnosed with cancer increases with age, most cases occur in adults who are middle aged or older. About 80% of all cancers are diagnosed in people 55 years of age or older. In the U.S., approximately 40 out of 100 men and 39 out of 100 women will develop cancer during their lifetime. These probabilities are estimated based on the overall experience of the general population. Individuals within the population may have higher or lower risk because of differences in exposures (e.g., smoking), and/or genetic susceptibility. In addition, currently available treatments are variably effective for different cancers and individual patients. Together these patients’ risks and the treatment limitations suggest a significant current and long-term demand for improved and novel cancer treatments. Product Portfolio Our product portfolio consists of one commercial product and product candidates for the treatment of cancer patients. Serious adverse effects (“SAEs”) in patients from our product and product candidates could result in a clinical hold or the withdrawal of regulatory approval and have a negative impact on future sales. See our specific SAE risk factor within Item 1A. Risk Factors – Risks Related to Our Business --Reports of adverse events or safety concerns involving our commercial product or in-development products or similar agents, could delay or prevent us from obtaining or maintaining regulatory approval or negatively impact sales. Commercial Product ROLVEDON ROLVEDON (eflapegrastim) is a novel long-acting G-CSF that employs a proprietary LAPSCOVERY™ technology designed to enhance the duration of therapeutic effects and reduce the frequency of administration. ROLVEDON is FDA-approved for the treatment of adult patients with chemotherapy-induced neutropenia. We have a co-development and commercialization agreement with Hanmi Pharmaceutical Co. Ltd. (“Hanmi”) for ROLVEDON worldwide rights, except in Korea, China, and Japan, which we entered into in January 2012. The Centers for Medicare and Medicaid Services (“CMS”) has issued a permanent, product-specific J-code for ROLVEDON (J1449), which becomes effective on April 1, 2023. The 3 Table of Contents unique J-code, as well as ROLVEDON’S inclusion in the National Comprehensive Cancer Network® Supportive Care Guidelines, are important elements in establishing brand awareness and building customer confidence in our novel product. Chemotherapy can cause myelosuppression that can lead to neutropenia, a condition where the number of neutrophils or white blood cells are too low, which can lead to infection, hospitalization, and even death. G-CSF stimulates the production of white blood cells by the bone marrow. A recombinant form of G-CSF is used in appropriate cancer patients to accelerate recovery from neutropenia after chemotherapy, allowing higher-intensity treatment regimens to be given at full-dosage and on schedule. We submitted our BLA for ROLVEDON to the FDA on October 24, 2019. Our BLA was supported by data from two similarly designed Phase 3 clinical trials, ADVANCE and RECOVER, which evaluated the safety and efficacy of ROLVEDON in 643 early-stage breast cancer patients for the treatment of neutropenia due to myelosuppressive chemotherapy. Both studies met the pre-specified endpoint of non-inferiority relative to pegfilgrastim in duration of severe neutropenia and met all of the secondary endpoints. In addition, the safety profile was similar to pegfilgrastim. On April 11, 2022, we announced that we had received notice that our BLA had been accepted for filing and received a PDUFA action date of September 9, 2022. On September 9, 2022, we received the FDA marketing approval for ROLVEDON and began commercialization activities in the fourth quarter of 2022. In February 2023, the U.S. Centers for Medicare & Medicaid Services (“CMS”) issued a permanent J-code, J1449 for ROLVEDON, effective April 1, 2023. A company sponsored clinical trial that has been initiated to evaluate the administration of eflapegrastim on the same day as chemotherapy is currently ongoing. This Phase 1 clinical trial is a randomized, open label, actively controlled study to evaluate the same-day dosing of eflapegrastim on duration of neutropenia when administered at varying intervals following docetaxel and cyclophosphamide (TC) chemotherapy in patients with early-stage breast cancer. The study was completed with the enrollment of 16 patients dosed with eflapegrastim 30 minutes after chemotherapy on the same day in Cycle 1. The study added an Expansion Phase with a plan to dose approximately 45 patients with eflapegrastim 30 minutes after the chemotherapy on the same day in all 4 cycles. The overall safety profile to date for the 30-minute arm was similar to what has been seen previously in large, randomized studies with G-CSF given 24 hours after chemotherapy. The safety will be monitored continuously throughout the Expansion Phase of the study. An evaluation of safety and efficacy will be conducted once the data from 6 patients in the Expansion Phase is complete to determine the trend. As part of the post-market requirement, Spectrum is expected to conduct a pediatric study in Rolvedon that includes the development of an appropriate formulation to dose certain pediatric patients of 1 month to 17 years of age based on weight-based dosing. The study as well as the development of a pediatric formulation is in progress. In Development Pipeline Poziotinib Poziotinib is a novel, pan-HER inhibitor that is designed to irreversibly block signaling through the Epidermal Growth Factor Receptor (“EGFR”) family of TKIs, including HER1 (erbB1; EGFR), HER2 (erbB2), HER4 (erbB4), and HER receptor mutations. This, in turn, leads to the inhibition of the proliferation of tumor cells that over-express these receptors. Mutations of over-expression/amplification of EGFR family receptors have been associated with a number of different cancers, including NSCLC, breast cancer, and gastric cancer. In March 2015, we entered into a co-development and commercialization agreement with Hanmi for poziotinib worldwide rights, except in Korea and China. Our clinical development program for poziotinib has been focused on previously treated locally or advanced metastatic NSCLC, first-line treatment of NSCLC and treatment of other solid tumors with HER2 mutations. NSCLC tumors with HER2 exon 20 insertion mutations are rare and have generally not been responsive to other TKIs. Patients with these mutations have a poor prognosis, and available treatment options are limited. Poziotinib, due to its unique chemical structure and characteristics, is believed to inhibit cell growth of tumors with HER2 exon-20 insertion mutations. In October 2017, we announced the start of a pivotal Phase 2 global clinical trial with active sites in the U.S., Canada and Europe (“ZENITH20”). The ZENITH20 trial consisted of seven cohorts of NSCLC patients. Cohorts 1, 2, 3 and 4 had completed enrollment while Cohorts 5, 6, and 7 ceased enrolling patients upon the receipt of the CRL (discussed below). Cohorts 1 (EGFR) and 2 (HER2) included previously treated NSCLC patients with exon 20 mutations. Cohort 3 (EGFR) and 4 (HER2) included first-line NSCLC patients with exon 20 mutations. Cohorts 1- 4 were each independently powered for a pre-specified statistical hypothesis and the primary endpoint was objective response rate (“ORR”). Cohort 5 included previously treated or treatment- naïve NSCLC patients with EGFR or HER2 exon 20 insertion mutations and evaluated different dosing regimens. Cohort 6 included NSCLC patients with classical EGFR mutations who progressed while on treatment with first-line 4 Table of Contents osimertinib and developed an additional EGFR mutation. Cohort 7 included NSCLC patients with a variety of less common mutations in EGFR or HER2 exons 18-21 or the extracellular or transmembrane domains. On December 26, 2019, we announced that the pre-specified primary endpoint was not met in Cohort 1 of the ZENITH20 trial evaluating poziotinib in previously treated NSCLC patients with EGFR exon 20 insertion mutations. Cohort 1 enrolled a total of 115 patients who received 16 mg/day of poziotinib. The intent-to-treat analysis showed that 17 patients had a response (by RECIST) and 62 patients had stable disease for a 68.7% disease control rate (“DCR”). The confirmed ORR was 14.8% (95% Confidence Interval (“CI”) 8.9%-22.6%). The median duration of response was 7.4 months and the progression free survival was 4.2 months. The safety profile was in-line with other second-generation EGFR TKIs. On July 27, 2020, we announced that we met the pre-specified primary endpoint for Cohort 2 in the ZENITH20 trial evaluating previously treated NSCLC patients with HER2 exon 20 insertion mutations. Cohort 2 enrolled a total of 90 patients who received an oral, once daily dose of 16 mg of poziotinib. All the patients had failed at least one line of prior systemic therapy with 60 patients (67%) having failed two or more prior therapies, including chemotherapy and immunotherapy. All responses were read independently and confirmed by a central imaging laboratory using RECIST criteria. The intent-to-treat analysis demonstrated a confirmed ORR of 27.8% (95% CI of 18.9%-38.2%). Based on the pre-specified statistical hypothesis for the primary endpoint, the observed lower bound of 18.9% exceeded the pre-specified lower bound of 17% in this heavily pre-treated population. The safety profile was in-line with the type of adverse events seen with other second-generation EGFR TKIs. These results were presented at the European Society for Medical Oncology (“ESMO”) Virtual Congress 2020 Science Weekend held in September 2020. In December 2020, we reported that the pre-specified primary endpoint in Cohort 3 evaluating poziotinib in first-line NSCLC patients with EGFR exon 20 insertion mutations was not met. Cohort 3 of the ZENITH20 clinical trial enrolled a total of 79 patients who received an oral once daily dose of 16 mg of poziotinib. The median time of follow up of all patients was 9.2 months. The intent-to-treat analysis showed that 22 patients had a partial response (by RECIST) and 68 patients had stable disease for an 86.1% DCR. 91% of patients experienced tumor reduction with a median reduction of 25.5%. The confirmed ORR was 27.8% (95% CI 18.4-39.1%). Based on the pre-specified statistical hypothesis for the primary endpoint, the observed lower bound of 18.4% did not meet the pre-specified lower bound of >20%. The median duration of response was 6.5 months and the median progression free survival was 7.2 months. The safety profile was similar with the type of adverse events observed with other second-generation EGFR TKIs. Grade 3 treatment related rash was 33% and diarrhea was 23%. 94% of patients had drug interruptions with 6 patients (8%) permanently discontinuing due to adverse events. In March 2021, we announced that the FDA granted fast track designation for poziotinib based on data from Cohort 2 of ZENITH20, which evaluated previously treated patients with NSCLC with HER2 exon 20 insertion mutations. On December 6, 2021, we announced the submission of our NDA seeking accelerated approval for poziotinib to the FDA for use in patients with previously treated locally advanced or metastatic NSCLC with HER2 exon 20 insertion mutations. The NDA submission was based on the positive results of Cohort 2 from the ZENITH20 clinical trial, which assessed the safety and efficacy of poziotinib in previously treated patients with NSCLC with HER2 exon 20 insertion mutations. On February 11, 2022, we announced that the NDA had been accepted and an action date of November 24, 2022 had been set. In March 2022, we presented the results of Cohort 4 at the ESMO Targeted Anticancer Therapies (“TAT”) meeting. Cohort 4 of the ZENITH20 clinical trial enrolled a total of 70 patients, 48 of whom received an oral once daily dose of 16 mg of poziotinib and 22 of who received an oral twice daily dose of 8 mg of poziotinib. The intent-to-treat analysis demonstrated a confirmed ORR of 41% (95% CI of 30%-54%). Based on the pre-specified statistical hypothesis for the primary endpoint, the observed lower bound of 30% exceeded the pre-specified lower bound of 20%. The median duration of response was 5.7 months and median progression free survival was 5.6 months. The most common treatment related Grade ≥ 3 adverse events were rash (30%), stomatitis (19%), diarrhea (14%), and paronychia (7%). In addition, the incidence of Grade ≥ 3 pneumonitis was low at 3%. The safety profile was consistent with the TKI class. On September 22, 2022, we met with the FDA’s ODAC. On the question of whether the current benefits of poziotinib outweigh its risks for the treatment of patients with NSCLC with HER2 exon 20 insertion mutations, the ODAC voted 9 (no) – 4 (yes) that the current benefits of poziotinib did not outweigh its risks. On November 25, 2022, we announced that we had received a CRL from the FDA regarding our NDA for poziotinib. The CRL stated that the FDA determined that it could not approve the NDA in its present form and provided recommendations needed for resubmission, including generating additional data from a randomized controlled study prior to approval. We are continuing to evaluate those recommendations but we have de- prioritized further poziotinib development activities. Manufacturing 5 Table of Contents We currently do not have internal manufacturing capabilities. Our product is and our product candidates are manufactured by third parties that specialize in these services. We expect to continue to contract with third-parties for our manufacturing and packaging requirements, including API and finished-dosage products. We believe that our current agreements with these third-party manufacturers provide sufficient capacity to support our clinical requirements and the anticipated commercial demand for ROLVEDON. We attempt to prevent supply disruption through our executed supply agreements, appropriate forecasting, and maintaining base stock levels. Sales and Marketing Strategy We presently market ROLVEDON through group purchasing organizations (“GPOs”), wholesalers, specialty distributors or directly to clinics and hospitals in the U.S. All of our revenue is derived from sales within the U.S. The primary decision makers for our products are oncologists, hematologists and account administrators. As of December 31, 2022, our U.S. sales force (sales management, sales representatives, and sales administrative support) numbered 39 employees. Competition The pharmaceutical industry is characterized by rapidly-evolving technology and intense competition, which we expect to persist. Many companies are engaged in research and development of compounds that are similar to ours – both commercialized and in development, which fosters continuous innovation. In the event that one or more of our competitor’s programs are successful, the market for our product and product candidates could be reduced or eliminated. Any product for which we obtain FDA approval must also compete for market acceptance and market share. Our successful marketing of branded products, upon FDA approval, depends primarily on the ability to communicate the effectiveness, safety, and value of the products to healthcare professionals in private practice, group practices, hospitals, academic institutions, and managed care organizations. Competition for branded drugs is less driven by price and is more focused on innovation in treatment of disease, advanced drug delivery, and specific clinical benefits over competitive drug therapies. Unless our products are shown to be differentiated (e.g., have a better safety profile, efficacy, and/or cost- effectiveness) compared to other alternatives, they may not gain acceptance by medical professionals and may therefore never be commercially successful. Companies that have products on the market or in research and development that target the same indications as our in-development products or new compounds sought include, among others: Amgen, Inc., Coherus BioSciences, Mylan Pharmaceuticals, Inc., Sandoz, Pfizer, AstraZeneca plc, Takeda Pharmaceutical Company Ltd, Rain Therapeutics Inc., Janssen Research & Development, Taiho Pharmaceutical Co., Ltd., Cullinan Oncology, LLC, Daiichi-Sankyo Co., Ltd., Genentech, Inc., Gilead Sciences, Inc., Jiangsu Hengrui Pharmaceuticals Co., Ltd., and Novartis International AG. Each of the aforementioned companies may be more advanced in the development of competing product candidates. Many of these competitors are large and well-capitalized companies focusing on a wide range of cancer types and have substantially greater resources and expertise than we do. As a consequence, they are able to spend more on product development, marketing, sales and other product initiatives than we can. Some of our competitors have: • significantly greater name recognition; • broader or deeper relations with healthcare professionals, customers and third-party payors; • more established distribution networks; • greater experience in conducting research and development, manufacturing, clinical trials, marketing and obtaining regulatory clearance or approval for products; and • greater financial and human resources for product development, sales and marketing and patent prosecution. We believe that the current competitive landscape for each of our key commercialized and in-development products, is as follows: (a) ROLVEDON is a novel long-acting G-CSF that employs a proprietary technology that is designed to prolong the duration of biologics, reducing the frequency of administration. There is currently one other novel long-acting G-CSF and five biosimilar G-CSFs marketed in the United States including, Neulasta® (pegfilgrastim), marketed by Amgen, Inc., UDENYCA™ (pegfilgrastim-cbqv), a biosimilar marketed by Coherus BioSciences, Fulphila® (pegfilgrastim-jmdb), a biosimilar marketed by Mylan Pharmaceuticals, Inc., Ziextenzo® (pegfilgrastim-bmez), a biosimilar marketed by Sandoz, NYVEPRIA™ (pegfilgrastim-apgf), a biosimilar 6 Table of Contents marketed by Pfizer, Inc. and Stimufend® (pegfilgrastim-fpgk), a biosimilar marketed by Fresenius Kabi. One additional biosimilar G-CSF, Fylnetra® (pegfilgrastim-pbbk) manufactured by Amneal Pharmaceuticals has been approved but is not on the market as of today . In addition, there are several novel products in development that may compete with ROLVEDON if they are approved, including G1 Therapeutics’ trilaciclib, BeyondSpring’s plinabulin, and Evive Biotech’s benegrastim. (b) Poziotinib is a novel investigational, oral, quinazoline-based pan-HER inhibitor that is designed to irreversibly block signaling through the EGFR family of tyrosine-kinase receptors, including human epidermal growth factor receptor (HER1/ErbB1/EGFR), HER2 (ErbB2), and HER4 (ErbB4), as well as HER receptor mutations. Poziotinib’s development program has been primarily focused on advanced NSCLC patients harboring exon 20 insertion mutations in HER2(ErbB2). At present there are no FDA approved therapies for metastatic NSCLC patients with HER2 exon 20 insertion mutations. There are a number of other targeted therapies focused on these subtypes of NSCLC that are in early clinical investigation by our potential competitors, including: TAGRISSO (Osimertinib) - AstraZeneca, Tarlox (tarloxotinib) - Rain Therapeutics Inc., DS-8201a - Daiichi Sankyo, CLN081 - Taiho Pharmaceutical Co., Ltd., and Cullinan Oncology, LLC, and Pyrotinib - Jiangsu Hengrui Pharmaceuticals Co., Ltd. New drug development is the process whereby product candidates are tested for the purpose of filing an NDA or a BLA in the U.S. (or similar filing in other countries). Obtaining marketing approval from the FDA or similar regulatory authorities outside of the U.S. is an inherently uncertain, lengthy, and expensive process that requires several phases of clinical trials to demonstrate to the satisfaction of the appropriate regulatory authorities that the product is both safe and effective for its respective indications. Our development focus is primarily based on acquiring and developing late-stage development drug candidates as compared to new drug discovery, which is particularly uncertain and lengthy. Our product and late-stage product candidate are summarized below: ROLVEDON™ (eflapegrastim-xnst) Poziotinib An investigational orally administered, irreversible TKI for the treatment of solid tumors. Our research and development expenses for drug development are comprised of our personnel expenses, contracted services with third parties, license fees and milestone payments to third parties, clinical trial costs, laboratory supplies, drug products, and certain allocations of corporate costs. The below table summarizes our research and development expenses by project in 2022 and 2021: 7 Table of Contents Research and Development Expenses for the Year Ended December 31, (in thousands) 2022 2021 ROLVEDON $ (9,037) $ 14,785 Poziotinib 29,347 37,635 Anti-CD20-IFNα 50 1,073 Other in-development indications/drugs (104) 1,447 Total — Direct costs 20,256 54,940 Add: General research and development expenses (including personnel costs that correspond to more than one in- development project) 21,947 32,357 Total research and development expenses from continuing operations $ 42,203 $ 87,297 Total research and development expenses from discontinued operations $ 31 $ 59 Patents and Proprietary Rights Overview We in-license from third parties certain patents and related intellectual property rights related to our proprietary product and product candidates. Under most of these license arrangements, we are generally responsible for all development, patent filing, prosecution, and maintenance costs, sales, marketing and liability insurance costs related to our product and product candidates. In addition, these licenses and agreements may require us to make royalty and other payments and to reasonably utilize the underlying technology of applicable patents. If we fail to comply with these and other terms in these licenses and agreements, we could lose the underlying rights to one or more of our potential products, which would adversely affect our product development and harm our business. For more information regarding these arrangements see Note 8(b), “Financial Commitments & Contingencies and Key License Agreements,” to our accompanying Consolidated Financial Statements. The protection, preservation, and infringement-free commercial utilization of these patents and related intellectual property rights are very important to the successful execution of our strategy. However, the issuance of a patent is neither conclusive as to its validity nor as to the enforceable scope of the claims of the patent. Accordingly, our patents and the patents we have licensed may not prevent other companies from developing similar or functionally equivalent products or from successfully challenging the validity of our patents. If our patent applications are not allowed or, even if allowed and issued as patents, if such patents or the patents we have in-licensed are circumvented or not upheld in a court of law or in administrative proceedings, including oppositions, re-examinations or inter parties review, our ability to competitively utilize our patented products and technologies may be significantly reduced. Also, such patents may or may not provide competitive advantages for their respective products or they may be challenged or circumvented by competitors, in which case our ability to commercially sell these products may be diminished. From time-to-time, we may need to obtain licenses to patents and other proprietary rights held by third parties to develop, manufacture and market our products. If we are unable to timely obtain these licenses on commercially reasonable terms, our ability to commercially exploit such products may be inhibited or prevented. Patents and Licenses Summary We believe that our patents and licenses are critical to operating our business, as summarized below. ROLVEDON: Composition of matter patents covering ROLVEDON, both foreign and domestic, are due to expire in 2036. We also have a ROLVEDON formulation patent granted in the U.S., Europe, Japan and other countries. The formulation patent will not expire in the U.S. until 2031. Additionally, a patent term extension has been filed and pending regulatory approval. ROLVEDON is also covered by additional patents and pending applications claiming various aspects of the technology and formulation that do or would provide protection until 2039. 8 Table of Contents Poziotinib: A composition of matter patent covering poziotinib is due to expire in 2028. Poziotinib is also covered by additional patents and patent applications covering its formulations and synthetic processes which will expire between 2032 and 2034. We have licensed patent applications covering the use of poziotinib that if granted, would expire in 2037. Patent Protection and Value Maximization We are constantly evaluating our patent portfolio and are currently assessing and filing patent applications for our product and product candidates and considering new patent applications in order to maximize the life cycle of each of our assets. While the U.S. and the European Union (EU) are currently the largest potential markets for most of our assets, we also have patents issued and patent applications pending outside of the U.S. and the EU. Limitations on patent protection in these countries, and the differences in what constitutes patentable subject matter in countries outside the U.S., may limit the protection we have on patents issued or licensed to us outside of the U.S. In addition, laws of foreign countries may not protect our intellectual property to the same extent as would laws in the U.S. To minimize our costs and expenses and to maintain effective protection, we usually focus our patent and licensing activities within the U.S., the EU, Canada, and Japan. In determining whether or not to seek a patent or to license any patent in a certain foreign country, we weigh the relevant costs and benefits, and consider, among other things, the market potential and profitability, the scope of patent protection afforded by the law of the jurisdiction and its enforceability, and the nature of terms with any potential licensees. Failure to obtain adequate patent protection for our proprietary drugs and technology would impair our ability to be commercially competitive in these markets. In conducting our business, we rely upon trade secrets, know-how, and licensing arrangements. We use customary practices for the protection of our confidential and proprietary information such as confidentiality agreements and trade secret protection measures. It is possible that these agreements will be breached or will not be enforceable in every instance, and that we will not have adequate remedies for any such breach. It is also possible that our trade secrets or know-how will otherwise become known or independently developed by competitors. The protection of know-how is particularly important because it is often necessary or useful information that allows us to practice the claims in the patents related to our proprietary product and product candidates. In addition to the specific intellectual property subjects discussed above, we have a trademark registration in the U.S. for Spectrum Pharmaceuticals, Inc.®. We also have trademarks for the Spectrum Pharmaceuticals’ logos. Any other trademarks are the property of their respective owners. Governmental Regulation The development, production and marketing of our proprietary drug product candidates and biological products are subject to extensive regulation by numerous governmental authorities in the U.S. and other countries. In the U.S., the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act (FDCA) and related regulations and regulates biological products under the FDCA and the Public Health Service Act (PHS Act) and related regulations. Drugs and biologics are also subject to other federal, state, local and foreign statutes and regulations. The FDA and comparable regulatory agencies in state and local jurisdictions and in foreign countries govern, among other things, the development, approval, manufacture, quality control, safety, effectiveness, labeling, packaging, storage, record keeping, distribution, reporting, promotion, advertising and import and export of drugs and biologics. Product development and approval within this regulatory framework, including for products already at a clinical stage of development, can take many years and require the expenditure of substantial resources, and to obtain FDA approval, a product must satisfy quality, safety, and efficacy requirements. In addition, each drug-manufacturing establishment must be registered with the FDA. Domestic manufacturing establishments must comply with the FDA’s current Good Manufacturing Practices (cGMP), regulations and are subject to inspections by the FDA. To supply drug ingredients or products for use in the U.S., foreign manufacturing establishments must also comply with cGMP and are subject to inspections by the FDA or by other regulatory authorities in certain countries under reciprocal agreements with the FDA. Government regulation may delay or prevent marketing of product candidates for a considerable period of time and impose substantial costs upon our activities. Failure to comply with applicable U.S. regulatory requirements at any time during the product development process or after approval may subject an applicant to administrative or judicial sanctions. FDA sanctions include refusal to approve pending applications, withdrawal of an approval or suspension or revocation of a license, clinical hold, warning or untitled letters, voluntary or mandatory product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, mandated corrective advertising or communications with doctors, debarment, restitution, disgorgement of profits, or civil or criminal penalties. In addition, government regulation may delay or prevent marketing of product candidates for a considerable period of time and impose costly procedures upon our activities. General Information about the Drug Development and Approval Process and Post-Marketing Requirements 9 Table of Contents The U.S. system of new drug and biologics development and approval is a rigorous process. Only a small percentage of compounds that enter the pre-clinical testing stage are ever approved for commercialization. Our strategy focuses on in-licensing clinical stage product candidates that are already in or about to enter human clinical trials. A late-stage focus helps us to effectively manage the high cost of drug development by focusing on compounds that have already passed the many hurdles in the pre-clinical and early clinical process. The process required by the FDA before drugs and biologics may be marketed in the United States generally involves the following: • completion of nonclinical laboratory and animal tests according to good laboratory practices (GLP) and other applicable requirements for the humane use of laboratory animals; • submission to the FDA of an Investigational New Drug application (IND) which must become effective before human clinical trials may begin; • approval of the protocol and related documentation by an independent institutional review board (IRB) or ethics committee at each clinical trial site before each trial may be initiated; • performance of adequate and well-controlled human clinical trials according to the FDA’s regulations commonly referred to as Good Clinical Practices (GCP) and any additional requirements for the protection of human research subjects and their health information; • for a drug, submission of an NDA that includes substantive evidence of the product’s safety and efficacy and, for a biologic, submission to the FDA of a BLA for marketing approval that includes substantive evidence of safety, purity, and potency; • satisfactory completion of an FDA pre-approval inspection of manufacturing facilities where the product is produced to assess compliance with cGMP to assure that the facilities, methods and controls are adequate; • potential FDA audit of certain nonclinical study sites and clinical trial sites that generated the data in support of an NDA or BLA; • review of the product candidate by an FDA advisory committee, where appropriate; and • FDA review of the NDA or BLA and the approval or licensure thereof, which must occur before a drug or biologic, respectively, can be marketed or sold. Pre-clinical Testing: Before testing any drug or biologic candidate in humans, laboratory and animal studies are conducted to assess the biological activity and safety of a drug or biologic candidate against the targeted disease. The conduct of the pre-clinical tests must comply with federal regulations and requirements including GLP. Additional pre-clinical testing may be required or requested by a regulatory authority even after clinical trials have begun. Investigational New Drug Application: After certain pre-clinical studies are completed, an IND application is submitted to the FDA to request the ability to begin human testing of the drug or biologic. As a part of its IND application, the trial sponsor must submit the results of the pre-clinical studies, together with manufacturing information, analytical data, any available clinical data or literature and a proposed clinical protocol. An IND becomes effective thirty days after the FDA receives the application (unless the FDA notifies the sponsor of a clinical hold), or upon prior notification by the FDA. If the FDA notifies the sponsor of a clinical hold, the sponsor of the IND application must resolve any outstanding concerns with the FDA before the clinical trial may begin. The FDA also may impose a clinical hold on ongoing clinical trials due to safety concerns or non-compliance. If a clinical hold is imposed, a trial may not recommence without FDA authorization and then only under terms authorized by the FDA. A clinical hold may either be a full clinical hold or a partial clinical hold that would limit a trial, for example, to certain doses or for a certain length of time or to a certain number of subjects. Further, an independent IRB for each site proposing to conduct the clinical trial must review and approve the plan for any clinical trial before it commences at that site. An IRB is charged with protecting the welfare and rights of study subjects and considers such items as whether the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the form and content of the informed consent that must be signed by each clinical trial subject or his or her legal representative and must monitor the clinical trial until completed. Clinical Trials: Clinical trials involve the administration of a product candidate to healthy volunteers or patients under the supervision of qualified investigators. Clinical trials are conducted under protocols detailing, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria, and the parameters to be used to monitor subject safety, including rules that assure a clinical trial will be stopped if certain adverse events occur. Each protocol and any amendments to the protocol must be submitted to the FDA and to the IRB. Information about certain clinical trials must be 10 Table of Contents submitted with specific timeframes to clinical trial registries, such as clinicaltrials.gov. Clinical trials are typically conducted in three sequential phases that may overlap or be combined: • Phase 1 Clinical Trials: These trials typically involve small numbers of healthy volunteers or patients and usually define a drug candidate’s safety profile, including the safe dosage range and may also provide early evidence of effectiveness. • Phase 2 Clinical Trials: These trials are conducted in a limited number of patients with the targeted disease to preliminarily assess the drug candidate’s effectiveness. These studies are designed primarily to determine the appropriate dose levels, dose schedules and route(s) of administration, as well as to determine if there are any side effects to expand the safety profile following Phase 1. These clinical trials, and Phase 3 trials discussed below, are designed to evaluate the product’s overall benefit-risk profile. Multiple Phase 2 clinical trials may be conducted by the sponsor to obtain information prior to beginning larger and more expensive Phase 3 clinical trials. • Phase 3 Clinical Trials: These trials usually involve a larger number of patients with the targeted disease to determine the product candidate’s efficacy and to observe and report any adverse reactions that may result from longer-term use on a large, more widespread, patient population. During Phase 3 clinical trials, typically the product is compared to either a placebo or a standard treatment for the target disease. Phase 3 trials often are designed to serve as the primary basis for developing physician labeling and for providing the substantial evidence of safety and effectiveness for an NDA or BLA. During all phases of clinical development, regulatory agencies require extensive monitoring and auditing of all clinical activities, clinical data, and clinical trial investigators. Annual progress reports detailing the results of the clinical trials must be submitted to the FDA. Within 15 calendar days, a sponsor must submit written IND safety report to the FDA and the study investigators for serious and unexpected adverse events; findings from other studies, tests in laboratory animals or in vitro testing that suggest a significant risk for human subjects; or any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure. The sponsor also must notify the FDA of any unexpected fatal or life-threatening suspected adverse reaction within seven calendar days after the sponsor’s initial receipt of the information. Regulatory authorities, a data safety monitoring board or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the participants are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the trial is not being conducted in accordance with the IRB’s requirements or if the product candidate has been associated with unexpected serious harm to patients, and the trial may not recommence without the IRB’s authorization. New Drug Application or Biologics License Application: To obtain approval to market a drug in the U.S., an NDA must be submitted to the FDA that provides data demonstrating the drug is safe and effective. Similarly, for a biological product in the U.S., a BLA must be submitted to the FDA that provides data establishing to the FDA’s satisfaction the safety, purity and potency of the product for the proposed indication. Both an NDA and BLA include all data available from pre-clinical studies and clinical trials, detailed information relating to the product’s manufacture and composition, and proposed labeling. Under PDUFA, each NDA and BLA must be accompanied by a user fee. The FDA adjusts the PDUFA user fees on an annual basis. PDUFA also imposes an annual prescription drug product program fee for drugs and biologics. Fee waivers or reductions are available in certain circumstances. Expedited Development and Review Programs: The FDA has established procedures for accelerating the development and approval of drugs for serious or life-threatening diseases for which the sponsor can demonstrate the potential to address unmet medical needs. These programs include fast track designation, breakthrough therapy designation, priority review, and accelerated approval. The FDA may grant “fast track” status to product candidates that are intended to treat serious or life-threatening diseases or conditions and demonstrate the potential to address an unmet medical need for the condition. Fast track is a process designed to facilitate the development and expedite the review of such product candidates by providing, among other things, more frequent meetings with the FDA to discuss the product candidate’s development plan and rolling review, which allows submission of individually completed sections of an BLA or NDA for FDA review before the entire submission is completed. The sponsor of a product candidate may request the FDA to designate the product as a fast track product at any time during clinical development. Fast track status does not ensure that a product will be developed more quickly or receive FDA approval. In addition, the fast track designation may be withdrawn by the FDA if the FDA believes that the designation is no 11 Table of Contents longer supported by data emerging in the clinical trial process, or if the designated drug development program is no longer being pursued. A product candidate intended to treat a serious or life-threatening disease or condition may also be eligible for breakthrough therapy designation if preliminary clinical evidence indicates that it may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints. The benefits of breakthrough therapy designation include the same benefits as fast track designation, plus intensive guidance from the FDA to ensure an efficient drug development program. The FDA may give a priority review designation to a product candidate if it has the potential to provide safe and effective therapy where no satisfactory alternative therapy exists or to provide a significant improvement in the treatment, diagnosis or prevention of a disease compared to marketed products. Priority review is intended to reduce the time it takes for the FDA to review an NDA or BLA, with the goal to take action on the application within six months from when the application is filed, compared to ten months for a standard review. The FDA will attempt to direct additional resources to the evaluation of an application for a biological product or drug designated for priority review in an effort to facilitate the review. Additionally, a product may be eligible for accelerated approval. Drugs or biologics studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may receive accelerated approval, which means that they may be approved on the basis of adequate and well-controlled clinical trials establishing that the product has an effect on a surrogate endpoint that is reasonably likely to predict a clinical benefit, or on the basis of an effect on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments. As a condition of approval, the FDA may require that a sponsor of a biological product or drug receiving accelerated approval perform adequate and well-controlled post-marketing clinical trials with due diligence to confirm clinical benefit. Under the Food and Drug Omnibus Reform Act of 2022 (“FDORA”), the FDA is now permitted to require, as appropriate, that such confirmatory trials be underway prior to approval or within a specific time period after the date accelerated approval is granted. In addition, the FDA currently requires, unless otherwise informed by the agency, pre-approval of promotional materials for products being considered for accelerated approval. Under FDORA, the FDA has increased authority for expedited procedures to withdraw approval of a drug or indication approved under accelerated approval if, for example, the confirmatory trial fails to verify the predicted clinical benefit of the product. Fast track designation, breakthrough therapy designation, priority review and accelerated approval do not change the standards for approval but may expedite the development or approval process. Moreover, even if a product candidate qualifies for one or more of these programs, the FDA may later decide that the product candidate no longer meets the conditions for designation or decide that the time period for FDA review or approval will not be shortened. Pediatric Studies Under the Pediatric Research Equity Act (PREA), as amended, an NDA or BLA or supplement must contain data to assess the safety and effectiveness of the drug or biologic for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The intent of PREA is to compel sponsors whose products have pediatric applicability to study those products in pediatric populations. The FDCA requires manufacturers of drugs and biologics that include a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration to submit a pediatric study plan to the FDA as part of the IND application. The plan must be submitted not later than 60 days after the end-of-Phase 2 meeting with the FDA; or if there is no such meeting, before the initiation of any Phase 3 trials or a combined Phase 2 and Phase 3 trial; or if no such trial will be conducted, no later than 210 days before submitting a marketing application or supplement. The FDA may grant deferrals for submission of data or full or partial waivers. Generally, PREA does not apply to any drug or biologic for an indication for which orphan designation has been granted. NDA/BLA Approval: The FDA approves drugs and biologics, respectively, based on the data and information in the NDA or BLA application demonstrating the product is safe and effective for its proposed use(s) and that the product’s benefits outweigh its risks. The FDA has 60 days from its receipt of an NDA or BLA to determine whether the application will be accepted for filing based on the agency’s threshold determination that the application is sufficiently complete to permit substantive review. The FDA may refuse to file any NDA or BLA that it deems incomplete or not properly reviewable at the time of submission and may request additional information. In this event, the NDA or BLA must be resubmitted with the additional information. The resubmitted application also is subject to review before the FDA accepts it for filing. After the NDA or BLA submission is accepted for filing, the FDA reviews the application to determine, among other things, whether the 12 Table of Contents proposed product is safe and effective for its intended use(s) and whether the product is being manufactured in accordance with cGMP to assure and preserve the product’s identity, safety, strength, quality, potency, and purity. The FDA may refer applications for novel products or products that present difficult questions of safety or efficacy to an advisory committee, typically comprised of clinicians and other experts, for evaluation and a recommendation as to whether the application should be approved and, if so, under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions. After the FDA completes its initial review of an NDA or BLA, it will communicate to the sponsor that the product will either be approved, or it will issue a Complete Response Letter (“CRL”) to communicate that the application will not be approved in its current form. The CRL usually describes all of the specific deficiencies in the NDA or BLA identified by the FDA. The deficiencies identified may be minor (e.g., requiring labeling changes) or major (e.g., requiring additional clinical trials). The CRL also may include recommended actions that the applicant might take to place the application in a condition for approval. If a CRL is issued, the applicant may either resubmit the NDA or BLA to address all of the deficiencies identified in the letter, or withdraw the application, or request a hearing. One of the performance goals of the FDA under PDUFA is to review 90% of standard BLAs and NDAs in 10 months and 90% of priority BLAs and NDAs in six months after the 60-day filing date. The FDA does not always meet its PDUFA goal dates and its review goals are subject to change from time to time. The review process and the PDUFA goal date may be extended by three months if the FDA requests or the BLA or NDA applicant otherwise provides additional information or clarification regarding information already provided in the submission within the last three months before the PDUFA goal date. The FDA will also review the NDA or BLA applicant’s manufacturing process and controls to ensure they are adequate to preserve the drug’s identity, strength, quality, and purity. Finally, the FDA will review and approve the product’s proposed labeling. Even if a product candidate receives regulatory approval, the approval may be limited to specific disease states, patient populations and dosages, or the indications for use may otherwise be limited. Further, the FDA may require that certain contraindications, warnings, or precautions be included in the product labeling. Postmarketing studies: As a condition of approval, the FDA may require sponsors to conduct additional studies or clinical trials after approval has been granted. These postmarketing requirements (PMRs) may be required for a number of reasons including postmarketing studies or clinical trials to demonstrate clinical benefit for drugs approved under accelerated approval, or deferred pediatric studies, where studies are required under the Pediatric Research Equity Act (PREA): • The Food and Drug Administration Amendments Act of 2007, or FDAAA, significantly added to the FDA’s authority to require post-approval studies. Under FDAAA, the FDA may require sponsors to conduct further clinical trials to assess a known serious risk, assess signals of serious risk, or identify an unexpected serious risk. If required to conduct a post-approval study, periodic status reports must be submitted to the FDA. Failure to conduct such post-approval studies in a timely manner may result in administrative action being taken by FDA, including civil fines. In addition, a sponsor may voluntarily conduct Phase 4 studies to gain more information about the product, including to explore additional patient populations, compare the product to a competitor, or to further study the risks, benefits and optimal use of a product. Postmarketing Regulation Following approval of a new drug or biological product, the manufacturer and the approved product are subject to continuing regulation by the FDA, including, among other things, monitoring and record‑keeping activities, reporting of adverse experiences, and complying with promotion and advertising requirements. Prescription drug and biologic promotional materials must be submitted to the FDA in conjunction with their first use. Further, if there are any modifications to the drug or biologic, including changes in indications, labeling or manufacturing processes or facilities, the applicant may be required to submit and obtain FDA approval of a new BLA or BLA supplement, which may require the development of additional data or preclinical studies and clinical trials. Adverse events that are reported after marketing approval can result in additional limitations being placed on a product’s use and, potentially, withdrawal of the product from the market. The FDA has authority to mandate labeling changes to products at any point in a product’s life cycle based on new safety information derived from clinical trials, post-approval studies, peer-reviewed medical literature, or post-market risk identification systems data. The FDAAA also gave the FDA authority to require the implementation of a Risk Evaluation and Mitigation Strategy (REMS), for a product when necessary to assure that the product’s benefits outweigh its risks. The FDA may require the submission of a REMS before a product is approved, or after approval based on “new safety information,” including new analysis of existing safety information. A REMS may include a medication guide, patient package insert, a plan for communication with healthcare providers, or other elements 13 Table of Contents to assure safe use (ETASU) as the FDA deems are necessary to assure safe use of the product, which could include imposing certain restrictions on distribution or use of a product. A REMS must include a timetable for submission of assessments of the strategy at specified time intervals. Failure to comply with a REMS, including the submission of a required assessment, may result in substantial civil or criminal penalties. Additionally, the Drug Supply Chain Security Act (DSCSA) provides for an electronic system to identify and trace certain prescription drugs distributed in the U.S. The law’s requirements include the quarantine and prompt investigation of a suspect product to determine if it is illegitimate and notifying trading partners and the FDA of any illegitimate product. Drug manufacturers and other parties involved in the supply chain for prescription products must comply with product tracking and tracing requirements, including placing a unique product identifier on prescription drug packages. FDA Enforcement FDA regulations require that approved products be manufactured in specific approved facilities and in accordance with cGMP regulations which require, among other things, quality control and quality assurance, the maintenance of records and documentation, and the obligation to investigate and correct any deviations from cGMP. Manufacturers and other entities involved in the manufacture and distribution of approved drugs or biologics, and those supplying products, ingredients, and components of them, are required to register their establishments with the FDA and certain state agencies, and are subject to periodic announced and unannounced inspections by the FDA and certain state agencies for compliance with cGMP requirements and other regulatory requirements. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain cGMP compliance. The discovery of violative conditions, including failure to conform to cGMP regulations, could result in enforcement action. The FDA strictly regulates the marketing, labeling, advertising and promotion of drugs and biological products. Drugs and biological products may be promoted only for the approved indications and in accordance with the provisions of the approved label. The FDA does not regulate behavior of physicians in their choice of treatments and physicians may legally prescribe available products for uses that are not described in the product’s labeling and that differ from those approved by the FDA. However, the FDA does restrict an applicant’s communications regarding off-label use of their products. A company that is found to have improperly marketed or promoted an off-label use may be subject to significant liability, including criminal and civil penalties under the FDCA and False Claims Act, exclusion from participation in federal healthcare programs, and mandatory compliance programs. Failure to comply with the FDA and other governmental regulations can result in fines, unanticipated compliance expenditures, recall or seizure of products, total or partial suspension of production and/or distribution, suspension of the FDA’s review of NDAs or BLAs, enforcement actions, injunctions and criminal prosecution. Under certain circumstances, the FDA also has the authority to revoke previously granted drug approvals. Under its Fraud, Untrue Statements of Material Facts, Bribery and Illegal Gratuities Policy, the FDA can significantly delay the approval of a marketing application, or seek to withdraw an approved application where it identifies fraud or discrepancies in regulatory submissions. Such actions by the FDA may significantly delay or suspend substantive scientific review of a pending application during validity assessment or remove approved products from the market until the assessment is complete and questions regarding reliability of the data are resolved. Healthcare Reform The containment of healthcare costs has become a priority of federal and state governments, and the prices of drugs have been a focus in this effort. Changes in government legislation or regulation and changes in private third-party payors’ policies toward reimbursement for our products, if successfully developed and approved, may reduce reimbursement of our products’ costs to physicians, pharmacies, patients, and distributors. The U.S. government, state legislatures and foreign governments have shown significant interest in implementing cost-containment programs, including price controls, payment of rebates, restrictions on reimbursement and requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could limit our net revenue and results for products, if any, we commercialize in the future. The pricing and reimbursement environment for our products may change in the future and become more challenging due to state and federal healthcare reform measures. The American Recovery and Reinvestment Act of 2009, or ARRA, for example, allocated new federal funding to compare the effectiveness of different treatments for the same condition. The plan for the research was published in 2012 by the Department of Health and Human Services, the Agency for Healthcare Research and Quality and the National Institutes for Health, and periodic reports on the status of the research and related expenditures are 14 Table of Contents made to Congress. Although ARRA does not mandate the use of the results of comparative effectiveness studies for reimbursement purposes, it is not clear what effect, if any, the research will have on the sales of any products for which we receive marketing approval or on the reimbursement policies of public and private payors. It is possible that comparative effectiveness research demonstrating benefits in a competitor’s product could adversely affect the sales of any product for which we receive marketing approval. For example, if third-party payors find our products not to be cost-effective compared to other available therapies, they may not cover our products after approval as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow us to sell our products on a profitable basis. The Patient Protection and Affordable Care Act of 2010 (PPACA) is a sweeping measure intended to expand healthcare coverage within the U.S., primarily through the imposition of health insurance mandates on employers and individuals, the provision of subsidies to eligible individuals enrolled in plans offered on the health insurance exchanges, and the expansion of the Medicaid program. This law has substantially changed the way healthcare is financed by both governmental and private insurers and has significantly impacted the pharmaceutical industry. These changes have impacted previously existing government healthcare programs and have resulted in the development of new programs, including Medicare payment for performance initiatives and improvements to the Medicare physician quality reporting system and feedback program. One of the goals of the PPACA was to expand coverage for the uninsured while at the same time containing overall healthcare costs. With regard to pharmaceutical products, among other things, the PPACA increased minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program and extended manufacturers’ Medicaid rebate liability to drugs dispensed to individuals who are enrolled in Medicaid managed care organizations. Some states have elected not to expand their Medicaid programs by raising the income limit to 133% of the federal poverty level, as is permitted under the PPACA. For each state that does not choose to expand its Medicaid program, there may be fewer insured patients overall, which could impact sales of our products that are approved and that we successfully commercialize, and our business and financial condition. Where Medicaid patients receive insurance coverage under any of the new options made available through the PPACA, the possibility exists that manufacturers may be required to pay Medicaid rebates on drugs used under these circumstances, a decision that could impact manufacturer revenues. Certain provisions of the ACA have been subject to judicial challenges as well as efforts to modify them or to alter their interpretation or implementation. For example, Congress eliminated, starting January 1, 2019, the tax penalty for not complying with the PPACA’s individual mandate to carry health insurance. Further, the Bipartisan Budget Act of 2018, among other things, amended the Medicare statute to reduce the coverage gap in most Medicare drugs plans, commonly known as the “donut hole,” by raising the required manufacturer point-of-sale discount from 50% to 70% off the negotiated price effective as of January 1, 2019. Provisions of the Inflation Reduction Act of 2022 (IRA) will serve to eliminate this coverage gap by reducing Medicare beneficiaries’ out-of-pocket maximum from $7,050 to $2,000, starting January 1, 2025. Additional legislative changes, regulatory changes, and judicial challenges related to the PPACA remain possible, but the nature and extent of such potential changes or challenges are uncertain at this time. It is unclear how the PPACA and its implementation, as well as efforts to modify or invalidate the PPACA, or portions thereof, or its implementation, will affect our business, financial condition and results of operations. It is possible that the PPACA, in its current form or as it may be amended in the future, and other healthcare reform measures that may be adopted in the future could have a material adverse effect on our industry generally and on our ability to maintain or increase sales of our product or product candidates for which we receive regulatory approval or to successfully commercialize our product and product candidates. Other legislative changes relating to reimbursement have been adopted in the U.S. since the ACA was enacted. For example, on August 2, 2011, the Budget Control Act of 2011 and subsequent legislation, among other things, resulted in aggregate reductions to Medicare payments to providers of, on average, 2% per fiscal year through 2031 (with the exception of a temporary suspension from May 1, 2020 through June 30, 2022, due to the COVID-19 pandemic). As long as these cuts remain in effect, they could adversely impact payment for any products we may commercialize in the future. We expect that additional federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, and in turn could significantly reduce the projected value of certain development projects and reduce our profitability. Additional legislative changes, regulatory changes, or guidance could be adopted, which may impact the marketing approvals and reimbursement for our product candidates. For example, there has been increasing legislative, regulatory, and enforcement interest in the United States with respect to drug pricing practices. There have been several Congressional inquiries and proposed and enacted federal and state legislation and regulatory initiatives designed to, among other things, bring more transparency to product pricing, evaluate the relationship between pricing and manufacturer patient assistance and support programs, potentially permit government negotiation of Medicare pricing with manufacturers relative to certain international prices paid, and reform government healthcare program reimbursement methodologies for drug products. If healthcare policies 15 Table of Contents or reforms intended to curb healthcare costs are adopted or if we experience negative publicity with respect to pricing of our products or the pricing of pharmaceutical drugs generally, the prices that we charge for any approved products may be limited, our commercial opportunity may be limited and/or our revenues from sales of our products may be negatively impacted. The IRA includes several provisions that may impact our business to varying degrees, including imposing a new manufacturer financial liability on certain drugs and biologics dispensed Medicare Part D, starting in 2025. The IRA also allows the U.S. government to negotiate Medicare Part B and Part D price caps for certain high-cost drugs and biologics without generic or biosimilar competition, with the first set of drugs being selected for negotiation in 2023. The IRA also requires manufacturers to pay rebates to Medicare for certain drug prices that increase faster than inflation under Medicare Part B and Medicare Part D. It is possible that the PPACA, as currently enacted or may be amended in the future, as well as other healthcare reform measures that may be adopted in the future, may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria and new payment methodologies and in additional downward pressure on coverage and payment and the price that we receive for any approved product. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our products. We cannot be sure whether additional legislative changes will be enacted in the United States or outside of the United States, or whether regulatory changes, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of our product candidates, if any, may be. Foreign Regulation Whether or not we obtain FDA approval for a product, we must obtain approval of a product by the comparable regulatory authorities of foreign countries before we can commence clinical trials or marketing of the product in those countries. The approval process varies from country/region to country/region, and the time may be longer or shorter than that required for FDA approval. The requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement also may vary, sometimes significantly, from country/region to country/region. Under the EU regulatory systems, we may submit marketing authorization applications either under a centralized procedure or decentralized procedure or the mutual recognition procedure. The centralized procedure is mandatory for medicines produced by a biotechnological process. The procedure is also mandatory for new active substances which are indicated for treatment of several diseases or conditions, including cancer and orphan conditions. Companies may apply for centralized assessment if the product contains a new active substance or the product constitutes significant therapeutic, scientific or technical innovation or the granting of authorization under the centralized procedure is in the interests of the EU patients. A centralized marketing authorization is valid in all EU member states. This marketing authorization is issued in the form of a European Commission decision which is legally binding in its entirety to which it is addressed. Directive 2004/27/EC introduced two parallel procedures to the centralized procedure to allow a product to be progressively authorized in each of the member states of the EU. They are the decentralized procedure and the mutual recognition procedure. The mutual recognition procedure applies where the product has already been authorized in a member state of the EU that will act as reference member state. The national marketing authorization granted by the reference member state forms the basis for mutual recognition in the member states chosen by the applicant. In the decentralized procedure, the product in question is not authorized in any one the EU member states. In such a situation, the applicant company will request a member state to act as the reference member state to lead the scientific assessment for the benefit/risk balance for agreement by the concerned member states. In both cases, the concerned member states have up to 90 days to accept or raise reasoned objections to the assessment made by the reference member state. In addition, pricing and reimbursement is subject to negotiation and regulation in most countries outside the U.S. Increasingly, adoption of a new product for use in national health services is subject to health technology assessment under the national rules and regulations to establish the clinical effectiveness and cost-effectiveness of a new treatment. In some countries, in order to contain health care expenditures, reference price is introduced in order for the national healthcare providers to achieve a price comparable to the reference price in the same therapeutic category. We may therefore face the risk that the resulting prices would be insufficient to generate an acceptable return to us. Third Party Reimbursement and Pricing Controls 16 Table of Contents All sales in the U.S. of ROLVEDON and any future commercialized products depend in part upon the availability of reimbursement from third-party payers. Third-party payers include government health programs, managed care providers, private health insurers and other organizations. ROLVEDON is reimbursed or purchased under several government programs, including Medicaid, Medicare Parts B and D, the 340B/Public Health Service program, and the Department of Veterans Affairs. Significant uncertainties exist as to the coverage and reimbursement status of our current products as well as any products for which we may obtain regulatory approval. In the U.S., sales of ROLVEDON, as well as any products for which we may receive regulatory approval for commercial sale will depend in part on the availability of coverage and reimbursement from third-party payers. Third-party payers include government authorities, managed care providers, private health insurers and other organizations. No uniform policy of coverage and reimbursement for drug products exists. Accordingly, decisions regarding the extent of coverage and amount of reimbursement to be provided for any of our products will be made on a payor-by-payor basis. As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be obtained. The process for determining whether a payer will provide coverage for a drug product may be separate from the process for setting the reimbursement rate that the payer will pay for the drug product. Third-party payers may limit coverage to specific drug products on an approved list, or formulary, which might not include all of the FDA-approved drugs for a particular indication. Moreover, a payer’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development. Third-party payers are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy. In order to obtain coverage and reimbursement for our current products and any product that might be approved for sale, we may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of any products, in addition to the costs required to obtain regulatory approvals. Our current product and product candidates may not be considered medically necessary or cost-effective. If third-party payers do not consider a product to be cost-effective compared to other available therapies, they may not cover the product after approval as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow a company to sell its products at a profit. The U.S. government and state legislatures have shown significant interest in implementing cost containment programs to limit the growth of government-paid healthcare costs, including price controls, limitations on coverage, increased rebates, restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs. For example, the PPACA contains provisions that may reduce the profitability of drug products, including, for example, increased rebates for drugs reimbursed by Medicaid programs, extension of Medicaid rebates to Medicaid managed care plans, mandatory discounts for certain Medicare Part D beneficiaries and annual fees based on pharmaceutical companies’ share of sales to federal healthcare programs. These and any additional healthcare reform measures could further constrain our business or limit the amounts that federal and state governments will pay for healthcare products and services, which could result in additional pricing pressures. Adoption of government controls and measures, and tightening of restrictive policies in jurisdictions with existing controls and measures, could limit payments for pharmaceuticals. The marketability of our current products and any products for which we receive regulatory approval for commercial sale may suffer if the government and third-party payers fail to provide adequate coverage and reimbursement. In addition, the emphasis on cost containment measures in the U.S. has increased and we expect will continue to increase the pressure on pharmaceutical pricing. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future. Government Price Reporting Manufacturers participate in, and have certain price reporting obligations under, the Medicaid Drug Rebate Program, state Medicaid supplemental rebate program(s), and other governmental pricing programs. Starting January 1, 2022, manufacturers are required to report the average sales price for certain drugs under the Medicare program regardless of whether the manufacturer participates in the Medicaid Drug Rebate Program. Previously, this reporting obligation extended only to manufacturers participating in the Medicaid Drug Rebate Program. Under this Program, manufacturers are required to pay a rebate to each state Medicaid program for covered outpatient drugs that are dispensed to Medicaid beneficiaries and paid for by a state Medicaid program as a condition of having federal funds being made available for their drugs under Medicaid and Part B of the Medicare program. 17 Table of Contents Medicaid is a joint federal and state program that is administered by the states for low-income and disabled beneficiaries. Medicaid rebates are based on pricing data reported by manufacturers on a monthly and quarterly basis to the CMS, the federal agency that administers the Medicaid and Medicare programs. These data include the average manufacturer price and, in the case of innovator products, the best price for each drug, which, in general, represents the lowest price available from the manufacturer to any entity in the U.S. in any pricing structure, calculated to include all sales and associated rebates, discounts, and other price concessions. The amount of the rebate is adjusted upward if the average manufacturer price increases more than inflation (measured by reference to the Consumer Price Index - Urban). Currently, the rebate is capped at 100 percent of the average manufacturer price, but, effective January 1, 2024, this cap on the rebate will be removed, and our rebate liability could increase accordingly. If a manufacturer becomes aware that its reporting for a prior quarter was incorrect, or has changed as a result of recalculating the pricing data, the manufacturer is obligated to resubmit the corrected data for up to three years after those data originally were due, which revisions could affect rebate liability for prior quarters. The PPACA made significant changes to the Medicaid Drug Rebate Program, and CMS issued a final regulation in 2016 to implement the changes to the Medicaid Drug Rebate Program under the PPACA. On December 21, 2020, CMS issued a final rule that modified Medicaid Drug Rebate Program regulations to permit reporting multiple best price figures with regard to value‑based purchasing arrangements (beginning in 2022); provided definitions for “line extension,” “new formulation,” and related terms with the practical effect of expanding the scope of drugs considered to be line extensions (beginning in 2022); and revised best price and average manufacturer price exclusions of manufacturer-sponsored patient benefit programs, particularly regarding potential inapplicability of such exclusions in the context of pharmacy benefit manager “accumulator” programs (beginning in 2023). Medicare is a federal program that is administered by the federal government that covers individuals age 65 and over or that are disabled as well as those with certain health conditions. Medicare Part B generally covers drugs that must be administered by physicians or other health care practitioners, among others. Medicare Part B generally pays for such drugs under a payment methodology based on the average sales price of the drugs. Manufacturers are required to report average sales price information to CMS on a quarterly basis. The manufacturer-submitted information is used by CMS to calculate Medicare payment rates. Congress could enact additional changes that affect our overall rebate liability and the information manufacturers report to the government as part of price reporting calculations. For example, the IRA, passed and signed into law in 2022, mandates that drug and biologics manufacturers pay rebates under the Medicare Part B and Part D programs to the extent that drug prices rise faster than the rate of inflation, as measured against a statutory benchmark period. Civil monetary penalties can be applied if a manufacturer is (1) found to have knowingly submitted any false pricing or other information to the government, (2) found to have made a misrepresentation in the reporting of our average sales price, or (3) fails to submit the required data on a timely basis. Such conduct also could be grounds for CMS to terminate a Medicaid Drug Rebate Program agreement, in which case federal payments may not be available under Medicaid or Medicare Part B for the manufacturer’s covered outpatient drugs. Federal law requires that any company that participates in the Medicaid Drug Rebate Program also participate in the Public Health Service’s 340B drug pricing program (the “340B program”) in order for federal funds to be available for the manufacturer’s drugs under Medicaid and Medicare Part B. The 340B program, which is administered by the Health Resources and Services Administration, or HRSA, requires participating manufacturers to agree to charge statutorily defined covered entities no more than the 340B “ceiling price” for the manufacturer’s covered outpatient drugs. Covered entities include hospitals that serve a disproportionate share of financially needy patients, community health clinics, and other entities that receive certain types of grants under the Public Health Service Act. The ACA expanded the list of covered entities to include certain free-standing cancer hospitals, critical access hospitals, rural referral centers, and sole community hospitals, but exempts “orphan drugs” from the ceiling price requirements for these covered entities. The 340B ceiling price is calculated using a statutory formula, which is based on the average manufacturer price and Medicaid rebate amount for the covered outpatient drug as calculated under the Medicaid Drug Rebate Program. In general, products subject to Medicaid price reporting and rebate liability are also subject to the 340B ceiling price calculation and discount requirement. In 2019, HRSA issued a final regulation regarding the calculation of the 340B ceiling price and the imposition of civil monetary penalties on manufacturers that knowingly and intentionally overcharge covered entities. It is currently unclear how HRSA will apply its enforcement authority under this regulation. Any charge by HRSA that a manufacturer has violated the requirements of the regulation could result in civil monetary penalties. Moreover, under a final regulation, effective January 2021, HRSA established an administrative dispute resolution (“ADR”) process for claims by covered entities that a manufacturer has engaged in overcharging, and by manufacturers that a covered entity violated the prohibitions against diversion or duplicate discounts. Such claims are to be resolved through an ADR panel of government officials rendering a decision that can be appealed to a federal court. An ADR proceeding could subject a manufacturer to onerous procedural requirements and could result in additional liability. HRSA also implemented a price reporting system under which 18 Table of Contents manufacturers are required to report 340B ceiling prices on a quarterly basis to HRSA, which then publishes those prices to 340B covered entities. In addition, legislation could be passed, that would further expand the 340B program to additional covered entities, or participating manufacturers could be required to agree to provide 340B discounted pricing on drugs used in an inpatient setting. In order to be eligible to have their products paid for with federal funds under the Medicaid and Medicare Part B program s and purchased by certain federal agencies (VA, Department of Defense (DoD), Coast Guard, and Public Health Service (PHS)) and grantees, manufacturers must participate in the U.S. Department of Veterans Affairs (VA) Federal Supply Schedule (FSS) pricing program. Prices for innovator drugs purchased by the VA, DoD, Coast Guard, and PHS are subject to a cap (known as the “Federal Ceiling Price”) equal to 76% of the annual non-federal average manufacturer price (non- FAMP) minus, if applicable, an additional discount. The additional discount applies if non-FAMP increases more than inflation (measured by reference to the Consumer Price Index – Urban (CPIU)). In addition, in the second and subsequent year, the price also is capped at prior year FSS contract plus CPIU. Manufacturers must also participate in the Tricare Retail Pharmacy Program, under which they pay quarterly rebates to DoD for prescriptions of innovator drugs dispensed to Tricare beneficiaries through Tricare Retail network pharmacies. The governing statute provides for civil monetary penalties for failure to provide information timely or for knowing submission of false information to the government. Medicare Part D generally provides coverage to enrolled Medicare patients for self-administered drugs (i.e., drugs that are not administered by a physician). Medicare Part D is administered by private prescription drug plans approved by the U.S. government and, subject to detailed program rules and government oversight, each drug plan establishes its own Medicare Part D formulary for prescription drug coverage and pricing, which the drug plan may modify from time to time. The prescription drug plans negotiate pricing with manufacturers and pharmacies, and may condition formulary placement on the availability of manufacturer rebates. In addition, manufacturers are required to provide to CMS a 70% discount on brand name prescription drugs utilized by Medicare Part D beneficiaries when those beneficiaries are in the coverage gap phase of the Part D benefit design. In addition to reducing Medicare Part D beneficiaries’ out-of-pocket annual maximum from $7,050 to $2,000, starting in 2025, the IRA (passed in 2022) will allow require manufacturers to offer a 10% or 20% discount on many brand-name drugs and biologics to Medicare Part D beneficiaries, depending on whether they have met their out-of-pocket maximum. Civil monetary penalties can be applied if a manufacturer fails to provide these discounts. Congress also enacted in the IRA a Medicare Part D inflation rebate, under which manufacturers would owe additional rebates if the average manufacturer price of a drug were to increase faster than the pace of inflation. The IRA also included provisions that would subject certain high-spend single-source drugs and biologics (i.e. without generic or biosimilar competition) to a price negotiation process under Part B and Part D. There are some exceptions for orphan drugs, low Medicare spend drugs, and plasma- derived products. Single-source biologics without biosimilar competition could be selected for participation in the drug price negotiation program at the earliest 11 years after approval. It is unknown what effect the drug price negotiation provisions or inflation rebate provisions of the IRA could have on our products. We further expect continued scrutiny on government price reporting from Congress, agencies, and other bodies. Group health plans, health insurance issuers, health maintenance organizations, other healthcare payors, and pharmacy benefit managers in the United States are adopting more aggressive utilization management techniques and are increasingly requiring significant discounts and rebates from manufacturers as a condition to including products on formulary with favorable coverage and cost-sharing. These payors may not cover or adequately reimburse for use of our products or may do so at levels that disadvantage them relative to competitive products. Outside the United States, within the EU, our products are paid for by a variety of payors, with governments being the primary source of payment. Government health authorities in the EU determine or influence reimbursement of products, and set prices or otherwise regulate pricing. Negotiating prices with governmental authorities can delay commercialization of our products. Governments may use a variety of cost-containment measures to control the cost of products, including price cuts, mandatory rebates, value-based pricing, and reference pricing (i.e., referencing prices in other countries or prices of competitive products and using those reference prices to set a price). Budgetary pressures in many EU countries are continuing to cause governments to consider or implement various cost-containment measures, such as price freezes, increased price cuts and rebates, and expanded generic substitution and patient cost-sharing. Recently, several states also have enacted or are considering legislation intended to make drug prices more transparent and deter significant price increases that impose reporting requirements on biopharmaceutical companies. These laws may affect our future sales, marketing, and other promotional activities by imposing administrative and compliance burdens. Such laws also typically impose significant civil monetary penalties for each instance of reporting noncompliance that can quickly aggregate into the millions of dollars. Healthcare Fraud and Abuse Laws 19 Table of Contents We are also subject to numerous fraud and abuse laws and regulations globally. In the U.S., there are a variety of federal and state laws restricting certain marketing practices in the pharmaceutical industry pertaining to healthcare fraud and abuse, including anti-kickback laws and false claims laws. Our sales, marketing, patient support and medical activities may be subject to scrutiny under these laws. The U.S. federal healthcare program Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving anything of value to induce (or in return for) the referral of business, including the purchase, recommendation or prescription of a particular drug reimbursable under Medicare, Medicaid or other federally financed healthcare programs. The statute has been interpreted to apply to arrangements between pharmaceutical companies on one hand and patients, prescribers, purchasers and formulary managers on the other. Although there are a number of statutory exemptions and regulatory safe harbors protecting certain common manufacturer business arrangements and activities from prosecution and administrative sanction, the exemptions and safe harbors are drawn narrowly and are subject to regulatory revision or changes in interpretation by the U.S. Department of Justice, or DOJ, and the Office of Inspector General of the U.S. Department of Health and Human Services, or OIG. Recent regulations that eliminate the discount safe harbor protection for manufacturer rebates paid directly, or indirectly through a pharmacy benefit manager (“PBM”) to Medicare Part D or Medicare Advantage plans, have been delayed by the IRA until January 1, 2032. Practices or arrangements that involve remuneration may be subject to scrutiny if they do not qualify for an exemption or safe harbor. Violations of the federal Anti-Kickback Statute may be established without providing specific intent to violate the statute, and may be punishable by civil, criminal, and administrative fines and penalties, damages, imprisonment, and/or exclusion from participation in federal healthcare programs. The federal civil False Claims Act prohibits, among other things, any person from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment of federal funds, or knowingly making, or causing to be made, a false statement to get a false claim paid, or knowingly and improperly avoiding, decreasing or concealing an obligation to pay money to the federal government. A claim resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim. The False Claims Act also permits a private individual acting as a “whistleblower” to bring actions on behalf of themselves and the federal government alleging violations of the statute and to share in any monetary recovery. Violations of the False Claims Act may result in significant financial penalties (including mandatory penalties on a per claim or statement basis), treble damages and exclusion from participation in federal health care programs. Pharmaceutical companies are subject to other federal false claim and statements laws, some of which extend to non-government health benefit programs. For example, the healthcare fraud provisions under the Health Insurance Portability and Accountability Act of 1996 and its implementing regulations, or HIPAA, impose criminal liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any health care benefit program, including private third party payors, or falsifying or covering up a material fact or making any materially false or fraudulent statement in connection with the delivery of or payment for health care benefits, items or services. Violations of HIPAA fraud provisions may result in criminal, civil and administrative penalties, fines and damages, including exclusion from participation in federal healthcare programs. The majority of states have adopted analogous laws and regulations, including state anti-kickback and false claims laws, that may apply to our business practices, including but not limited to, research, distribution, sales and marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payer, including private insurers. Other states have adopted laws that, among other things, require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources, and state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities. In addition, some states have laws requiring pharmaceutical sales representatives to be registered or licensed, and still others impose limits on co-pay assistance that pharmaceutical companies can offer to patients. The Physician Payments Sunshine Act requires pharmaceutical manufacturers to track and disclose to the federal government certain payments and transfers of value provided to U.S.-licensed physicians, certain non-physician licensed healthcare practitioners, and teaching hospitals as well as ownership interests held by physicians and their families, and reporting to the federal government and public disclosure by the federal government of this data. Employees As of December 31, 2022, we had 86 employees (as compared to 164 employees as of December 31, 2021), all of whom were full-time employees, 2 of whom hold an M.D. degree and 4 of whom hold a Ph.D. degree. 20 Table of Contents We are an equal opportunity employer and we maintain policies that prohibit unlawful discrimination based on race, color, religion, gender, sexual orientation, gender identity/expression, national origin/ancestry, age, disability, marital and veteran status. We are proud to employ a diverse workforce that, as of December 31, 2022, was 49% non-white and 44% women. In addition, as of December 31, 2022, women made up 29% of our senior leadership team. We strive to build and nurture a culture where all employees feel valued and embrace unique points of view. We believe that the success of our business will depend, in part, on our ability to attract and retain uniquely qualified personnel. We seek to provide people-focused policies that provide for the health, safety and welfare of our employees and their families, as well as professional development and training programs for our team members. In connection with the COVID-19 pandemic, we implemented the following policies: • Implemented safety procedures for all staff, which includes on site and essential travel training for those applicable employees; • Provided paid time off for any employee that missed time due to the COVID-19 pandemic including for the care of family members; and • Modified our flexible spending and 401(k) plans to allow employees more financial flexibility during the economic downturn resulting from the pandemic. We provide competitive compensation packages designed to attract and retain high-quality employees. All of our employees are eligible for cash bonuses and grants of equity awards. We regularly evaluate our compensation programs with an independent compensation consultant and utilize industry benchmarking in an effort to ensure competitiveness compared to similar biotechnology and biopharmaceutical companies with which we compete for talent, as well as fair and equitable treatment across our workforce with respect to gender, race, and other personal characteristics. In addition, we provide a variety of programs and services to help employees balance their career and home life, including an attractive mix of healthcare, insurance, and other benefit plans. We deliver a benefits program that is designed to keep our employees and their families healthy, which includes not only medical, dental and vision benefits, but also legal services, supplemental life insurance, pet insurance, paid parental leave, dependent care, mental health services, company sponsored fitness programs, and other wellness benefits and incentives. We also value career development for all employees, and we provide reimbursement and time for employees to attend professional development courses ranging from technical training, competency-based workshops and leadership development programs facilitated by external partners who are experts in their respective fields. Direct managers also take an active role in identifying individualized development plans to assist employees in realizing their full potential and creating opportunities for promotions and added responsibilities that enhance the engagement and retention of our workforce. Our employees are not part of any collective bargaining agreements and we believe that we have good relations with our employees. General Information We are a Delaware corporation. We originally incorporated in Colorado in December 1987 as Americus Funding Corporation. We changed our corporate name in August 1996 to NeoTherapeutics, Inc., and reincorporated in Delaware in June 1997. We changed our corporate name in December 2002 to Spectrum Pharmaceuticals, Inc. Our principal executive office is located at Pilot House - Lewis Wharf, 2 Atlantic Avenue, 6th Floor, Boston, Massachusetts 02110. Our telephone number is (617) 586-3900. Our website is located at www.sppirx.com. The information that can be accessed through our website is not incorporated by reference into this Annual Report and should not be considered to be a part hereof. We make our proxy statements and annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K (and related amendments to these reports, as applicable) available on our website free of charge as soon as practicable after filing or furnishing with the Securities and Exchange Commission (the “SEC”). All such reports are also available free of charge via EDGAR through the SEC website at www.sec.gov. In addition, the public may read and copy materials filed by us with the SEC at the SEC’s public reference room located at 100 F Street, NE, 21 Table of Contents Washington, D.C., 20549. Information regarding operation of the SEC’s public reference room can be obtained by calling the SEC at 1-800-732-0330. Item 1A. Risk Factors Before deciding to invest in our company, or to maintain or increase your investment, you should carefully consider the risks described below, in addition to the other information contained in this Annual Report and other reports we have filed with the SEC. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us, or that we currently deem immaterial, may also affect our business operations. If any of these risks are realized, our business, financial condition, or results of operations could be seriously harmed and in that event, the market price for our common stock could decline, and you may lose all or part of your investment. These risk factors should be considered in connection with evaluating the forward-looking statements contained in this Annual Report. These factors could cause actual results and conditions to differ materially from those projected in our forward-looking statements. SUMMARY OF RISK FACTORS You should carefully consider the following risk factors and all other information contained herein as well as the information included in this Annual Report and other reports and filings made with the SEC in evaluating our business and prospects. Risks and uncertainties, in addition to those we describe below, that are not presently known to us or that we currently believe are immaterial may also impair our business operations. If any of the following risks occur, our business and financial results could be harmed and the price of our common stock could decline. You should also refer to the other information contained in this Annual Report, including our Consolidated Financial Statements and the related Notes. Risks Related to Our Business • We have a history of net losses. We expect to continue to incur net losses and may not achieve profitability for some time, if at all. • ROLVEDON may cause adverse events or other safety concerns or have other properties that could limit the scope of market acceptance. • Even with regulatory approval for ROLVEDON, we will still face extensive regulatory requirements and ROLVEDON may face future regulatory difficulties. • If we are unable to continue to successfully develop poziotinib or any of our future pipeline product candidates, our business, prospects, operating results, and financial condition will be materially harmed. • Although we generate revenue from commercial sales, there is no guarantee of future commercial sales, and any future commercial sales may not be sufficient to sustain our business operations. • The COVID-19 pandemic and any similar future outbreaks could materially and adversely impact or disrupt our business and our financial condition, results of operations, cash flows and performance. • The pharmaceutical and biotechnology industries are intensely competitive. We are aware of several competitors attempting to develop and market products competitive to our commercial product and in-development product candidates, which may reduce or eliminate our commercial opportunities in the future. • We are highly dependent upon Hanmi, as the sole supplier for ROLVEDON drug substance. • Our supply of APIs, and drug products is and will remain dependent upon the production capabilities of contract manufacturing organizations (“CMOs”) and other third-parties for related supplies and logistical services. • Reports of adverse events or safety concerns involving our commercial product or in-development products or similar agents, could delay or prevent us from obtaining or maintaining regulatory approval or negatively impact sales. • A significant portion of our revenue has historically been derived from a limited number of distributors - and is expected to persist for our commercial and in-development drugs upon potential FDA approval. • We are a small company relative to our principal competitors, and our limited financial resources may limit our ability to develop and market our product and product candidates. • If actual future payments for allowances for discounts, returns, rebates and chargebacks exceed the estimates we made at the time of the sale of our products, our financial position, results of operations, and cash flows may be materially and negatively impacted. • Our business strategy requires that we engage in transactions that increase our capital requirements, cause us to incur debt or assume contingent liabilities, and possibly dilute our stockholders. • We may rely on CROs and other third parties to conduct clinical trials and, in such cases, we are unable to directly control the timing, conduct and expense of our clinical trials. • Competition for patients in conducting clinical trials may prevent or delay product development and strain our limited financial resources. 22 Table of Contents • The potential size of the market for our product and product candidates is uncertain. Risks Related to Our Industry • The future sale of our product candidates will be (and has historically been) subject to regulatory approvals and requirements. If we are unable to obtain regulatory approval for our product candidates, or if we fail to comply with governmental regulations, we will be limited in our ability to commercialize or sell our product and product candidates domestically or abroad and/or will be subject to penalties. • Failure to obtain regulatory approval outside the U.S. will prevent us from marketing our product candidates abroad. • Even if we receive regulatory approval to market our product candidates, the market may not be receptive to our product candidates upon their commercial introduction, which would negatively impact our ability to achieve profitability. • Legislative or regulatory reform of the healthcare system and pharmaceutical industry related to pricing, coverage or reimbursement may hurt our ability to sell our products profitably or at all. • Governmental pricing regulations could adversely affect our negotiated pricing, or limit product coverage and reimbursements which may adversely impact our operating results and our business. Risks Related to Our Common Stock • Future issuances of our common stock or other dilutive instruments, may materially and adversely affect the price of our common stock and cause dilution to our existing stockholders. • The market price and trading volume of our common stock fluctuate significantly and could result in substantial losses for individual investors. • We have not been in compliance with the requirements of the NASDAQ Stock Market for continued listing and if NASDAQ does not concur that we have adequately remedied our noncompliance, our common stock may be delisted from trading on NASDAQ, which could have a material adverse effect on us and our shareholders. Risks Relating to Our Intellectual Property • If we are unable to adequately protect our technology or enforce our patent rights, our business could suffer, and intellectual property rights don’t necessarily address all potential threats. • If we fail to comply with our obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose intellectual property rights that are important to our business. • An inability to protect our patents or trade secrets will have an adverse effect on our business, and patent terms may be inadequate to protect us from competitors. • Obtaining and maintaining our patent protection depends on compliance with various requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements. • We may be involved in additional lawsuits to defend or enforce our patents, which could be expensive, time-consuming and unsuccessful. General Risk Factors • We are subject to the risks of securities and related litigation, which may expose us to substantial liabilities and could seriously harm our business. • Global, market and economic conditions may negatively impact our business, financial condition and share price. For a more complete discussion of the material risks facing our business, see below. Risks Related to Our Business We have a history of net losses. We expect to continue to incur net losses and may not achieve profitability for some time, if at all. For the years ended December 31, 2022 and 2021, we had net losses of $75.4 million and $158.6 million, respectively. As of December 31, 2022, we had an accumulated deficit of $1.1 billion. We have incurred these losses principally from costs incurred in our research and development programs and from our selling, general and administrative expenses. If we choose to re-prioritize poziotinib development activities, that will cause us to continue to spend substantial amounts on research and development. Additionally, we expect to spend substantial amounts on the commercialization of ROLVEDON. Accordingly, we expect to continue to incur net losses in the foreseeable future and may not achieve profitability for some time, if at all. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. If we are unable to achieve and sustain profitability, the market value of our common stock will likely continue to decline. 23 Table of Contents Our business is significantly dependent on the successful commercialization of ROLVEDON in the United States and its approval and commercialization in other countries. ROLVEDON received FDA approval in September 2022 to decrease the incidence of infection, as manifested by febrile neutropenia, in adult patients with nonmyeloid malignancies receiving myelosuppressive anti-cancer drugs. With our de-prioritization of poziotinib in November 2022, we are significantly dependent on the successful commercialization of ROLVEDON in the United States and its approval and commercialization in other countries. This may make an investment in our company riskier than similar companies that have multiple products in their portfolio and/or multiple product candidates in active development and that therefore may be able to better sustain a failure of a single product. The success of our business, including our ability to finance our company and generate any revenue in the future, will, at this point, depend entirely on the commercialization of ROLVEDON in the United States. Any failure to successfully commercialize ROLVEDON in the United States or obtain regulatory approval of and commercialize ROLVEDON outside the United States would have a material and adverse impact on our business. If the markets or patient subsets that we are targeting are not as significant as we estimate, we may not generate significant revenues from sales of ROLVEDON. The commercial success of ROLVEDON will depend on a number of factors, including the following: • our ability to raise any additional required capital to support the commercialization on acceptable terms, or at all; • our ability to consistently manufacture ROLVEDON on a timely basis; • the prevalence, duration and severity of potential side effects or other safety issues that patients may experience with ROLVEDON; • achieving and maintaining, and, where applicable, ensuring that our third-party contractors achieve and maintain, compliance with our contractual obligations and with all regulatory requirements applicable to ROLVEDON; • the differentiation of ROLVEDON from other available approved or investigational drugs and treatments for patients with chemotherapy-induced neutropenia, and the willingness of physicians, operators of hospitals and clinics and patients to adopt and utilize ROLVEDON; • the timely receipt of necessary marketing approvals from foreign regulatory authorities; • our ability to successfully develop a commercial strategy and commercialize ROLVEDON internationally, if approved for marketing, sale and distribution in such countries and territories, whether alone or in collaboration with others; • the availability of coverage and adequate reimbursement from managed care plans, private insurers, government payors (such as Medicare and Medicaid and similar foreign authorities) and other third-party payors for ROLVEDON; • patients’ ability and willingness to pay out-of-pocket for ROLVEDON in the absence of coverage and/or adequate reimbursement from third-party payors; • patient demand for ROLVEDON; • our ability to establish and enforce intellectual property rights in and to ROLVEDON; and • our ability to avoid third-party patent interference, intellectual property challenges or intellectual property infringement claims. These factors, many of which are beyond our control, could cause us to experience significant delays or an inability to obtain regulatory approvals or commercialize ROLVEDON. While we have obtained regulatory approval of ROLVEDON in the United States, we may never be able to successfully commercialize ROLVEDON in the United States or receive regulatory approval of ROLVEDON outside the United States. Accordingly, we cannot provide assurances that we will be able to generate sufficient revenue through the sale of ROLVEDON to continue our business or achieve profitability. ROLVEDON may cause adverse events or other safety concerns or have other properties that could limit the scope of market acceptance, limit the commercial profile of its approved label, or result in significant negative consequences following regulatory approval. Adverse events caused by ROLVEDON could cause us, IRBs, clinical study sites or regulatory authorities to interrupt, delay or halt clinical studies and could result in a more restrictive label or the delay, denial or withdrawal of regulatory approval by the FDA or comparable foreign regulatory authorities. Clinical studies conducted with ROLVEDON have generated some adverse events. Additional adverse events could be generated during future clinical trials or clinical use. Our commercialization of ROLVEDON could be adversely impacted by adverse events, serious adverse events (“SAEs”) or other safety concerns. 24 Table of Contents Even though ROLVEDON has already received regulatory approval in the United States, if it is shown to cause serious or unexpected side effects after receiving market approval, a number of potentially significant negative consequences could result, including: • regulatory authorities may withdraw their approval of ROLVEDON or impose restrictions on its distribution; • regulatory authorities may require the addition of labeling statements, such as warnings or contraindications; • we may be required to change the way ROLVEDON is administered or conduct additional clinical studies; • we could be sued and held liable for harm caused to patients; and/or • our reputation may suffer. Any of these events could prevent us from achieving or maintaining market acceptance of ROLVEDON, limit the commercial profile of its approved label, and could substantially increase the costs of commercializing ROLVEDON, which could have a material adverse effect on our business, financial condition and results of operations. Even with regulatory approval for ROLVEDON, we will still face extensive regulatory requirements and ROLVEDON may face future regulatory difficulties. Even with regulatory approval of ROLVEDON in the United States or if approved in other countries, the FDA and comparable regulatory authorities in other countries may still impose significant restrictions on the indicated uses or marketing of ROLVEDON or impose ongoing requirements for potentially costly post-approval studies or post-marketing surveillance. ROLVEDON is subject to ongoing FDA requirements governing the labeling, packaging, storage, distribution, safety surveillance, advertising, promotion, record-keeping and reporting of safety and other post-marketing information. The holder of an approved BLA is obligated to monitor and report adverse events and any failure of a product to meet the specifications in the BLA. The holder of an approved BLA must also submit new or supplemental applications and obtain FDA approval for certain changes to the approved product, product labeling or manufacturing process. Advertising and promotional materials must comply with FDA rules and are subject to FDA review, in addition to other potentially applicable federal and state laws. The applicable regulations in countries outside the United States grant similar powers to the competent authorities and impose similar obligations on companies. In addition, manufacturers and their facilities are subject to payment of substantial user fees and continual review and periodic inspections by the FDA and other regulatory authorities, including equivalent regulatory authorities in other countries, for compliance with cGMP regulations and adherence to commitments made in the BLA or the application for marketing authorization. For certain commercial prescription products, manufacturers and other parties involved in the supply chain must also meet chain of distribution requirements and build electronic, interoperable systems for product tracking and tracing and for notifying the FDA of counterfeit, diverted, stolen and intentionally adulterated products or other products that are otherwise unfit for distribution in the U.S. The FDA and other regulatory authorities may also impose requirements for costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of a product. For example, for ROLVEDON, we have post-marketing requirements to conduct certain pediatric assessments, including the development of an appropriate formulation for pediatric patients 1 month to less than 17 years of age. If we or a regulatory authority discover previously unknown problems with ROLVEDON, such as adverse events of unanticipated severity or frequency, or problems with a facility where the product is manufactured, a regulatory authority may impose restrictions relative to ROLVEDON or the manufacturing facility, including requiring recall or withdrawal of the product from the market, suspension of manufacturing, or other FDA action or other action by the equivalent regulatory authorities in other countries. If we fail to comply with applicable regulatory requirements following approval of ROLVEDON, a regulatory authority may: • issue a warning letter, untitled letter or Form 483 asserting that we are in violation of the law; • seek an injunction or impose civil or criminal penalties or monetary fines; • suspend, modify or withdraw regulatory approval; • suspend any ongoing clinical trials; • impose restrictions on the manufacturing, labeling, marketing, or distribution or use of our product; • refuse to approve pending supplements to our approved BLA for ROLVEDON; • seize our product; • recall our product; • restrict coverage by third-party payors or exclude our product from federal health care programs; • refuse to permit the import or export of our product; and/or 25 Table of Contents • refuse to allow us to enter into supply contracts, including government contracts. If any of the above were to occur, our ability to successfully commercialize ROLVEDON and achieve profitability could be negatively impacted, which could have a material adverse effect on our business, financial condition and results of operations. We may incur significant liability if governmental authorities allege or determine that we are engaging in commercial activities or promoting ROLVEDON in a way that violates applicable regulations. Physicians have the discretion to prescribe drug products for uses that are not described in the product’s labeling and that differ from those approved by the FDA or other applicable regulatory agencies. Off-label uses are common across medical specialties. Although the FDA and other regulatory agencies do not regulate a physician’s choice of treatments, the FDA and other regulatory agencies regulate a manufacturer’s communications regarding off-label use and prohibit off-label promotion, as well as the dissemination of false or misleading labeling or promotional materials. Manufacturers may not promote drugs for off-label uses. Accordingly, we may not promote ROLVEDON in the U.S. for any indications other than its FDA-approved indication. The FDA and other regulatory and enforcement authorities enforce laws and regulations prohibiting promotion of off-label uses and the promotion of products for which marketing approval has not been obtained. A company that is found to have improperly promoted off-label uses, including promoting unapproved dosing regimens, may be subject to significant liability, which may include civil and administrative remedies as well as criminal sanctions. Notwithstanding regulations related to product promotion, the FDA and other regulatory authorities allow companies to engage in truthful, non- misleading, and non-promotional scientific exchange concerning their products. We currently, and intend to increasingly, engage in medical education activities and communicate with healthcare providers in compliance with all applicable laws and regulatory guidance. Even with FDA approval for ROLVEDON in the United States, we may never obtain approval for or commercialize ROLVEDON outside of the United States, which would limit our ability to realize its full market potential. In order to market ROLVEDON outside of the United States, we must establish and comply with numerous and varying regulatory requirements of other countries regarding quality, safety and efficacy. Clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not mean that regulatory approval will be obtained in any other country. Approval processes vary among countries and can involve additional product testing and validation and additional administrative review periods. Seeking foreign regulatory approval could result in difficulties and costs for us and require additional non- clinical studies or clinical trials, which could be costly and time-consuming. Regulatory requirements can vary widely from country to country and could delay or prevent the introduction of ROLVEDON in those countries. While our management has experience in obtaining foreign regulatory approvals, we, as a company, do not have experience in obtaining regulatory approval in international markets. If we fail to comply with regulatory requirements in international markets or to obtain and maintain required approvals, or if regulatory approval in international markets is delayed, our target market will be reduced, and our ability to realize the full market potential of ROLVEDON will be adversely affected. For example, in the European Union, similar to the United States’ regulatory framework for medicinal products, both marketing authorization holders and manufacturers of medicinal products are subject to comprehensive regulatory oversight by the EMA and the competent authorities of the individual European Union Member States both before and after the grant of manufacturing and marketing authorizations. This includes oversight of compliance with European Union GMP standards, which govern quality control of the manufacturing process and require the documentation of policies and procedures. We and our third-party manufacturers are required to ensure that all of our processes, methods, and equipment are compliant with GMP standards. Failure by us or by any of our third-party partners, including suppliers, manufacturers, and distributors to comply with European Union laws and the related national laws of individual European Union Member States governing the conduct of clinical trials, manufacturing authorizations, marketing authorizations of medicinal products, both before and after the grant of such authorizations, may result in administrative, civil, or criminal penalties. These penalties could include delays in or refusal to authorize the conduct of clinical trials or to grant marketing authorization, product withdrawals and recalls, product seizures, suspension, or variation of the marketing authorization, total or partial suspension of production, distribution, manufacturing, or clinical trials, operating restrictions, injunctions, suspension of licenses, fines, and criminal penalties, which could have a material adverse effect on our business, financial condition and results of operations. If we are unable to identify a strategic partner with appropriate sales and marketing capabilities to sell ROLVEDON in markets outside of the United States, if approved, and enter into a strategic partnership on commercially acceptable terms with such partner, we may be unable to generate sufficient revenue from ROLVEDON to achieve profitability. 26 Table of Contents To date, we have not entered into any strategic partnerships for the commercialization of ROLVEDON in the United States; however, we may enter into a strategic partnership to commercialize ROLVEDON outside of the United States, if approved. We face significant competition in seeking appropriate strategic partners, and these strategic partnerships can be intricate and time-consuming to negotiate and document. We may not be able to negotiate strategic partnerships on acceptable terms, or at all. We are unable to predict when, if ever, we will enter into any strategic partnerships because of the numerous risks and uncertainties associated with establishing strategic partnerships. In addition, our future collaboration partners, if any, may not dedicate sufficient resources to the commercialization of ROLVEDON outside of the United States or may otherwise fail in their commercialization efforts due to factors beyond our control. If we are unable to establish effective collaborations to enable the sale of ROLVEDON outside of the United States, if approved, or if our potential future collaboration partners do not successfully commercialize ROLVEDON in such countries, our ability to generate revenues from ROLVEDON will be adversely affected. If we obtain approval to commercialize ROLVEDON outside of the United States, a variety of risks associated with international operations could materially adversely affect our business. We may enter into agreements with third parties to seek approval for and market ROLVEDON outside the United States. We expect that we will be subject to additional risks related to entering into international business relationships, including: • different regulatory requirements for drug approvals in foreign countries; • reduced protection for intellectual property rights; • unexpected changes in tariffs, trade barriers and regulatory requirements; • economic weakness, including inflation, or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • foreign taxes, including withholding of payroll taxes; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country; • workforce uncertainty in countries where labor unrest is more common than in the United States; • production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; • lower pricing of products in our market segment or in general; and • business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods and fires. The realization of any of these risks would negatively affect our ability to attain or sustain profitability. If we are unable to continue to successfully develop poziotinib or any of our future pipeline product candidates, our business, prospects, operating results, and financial condition will be materially harmed. The announcement of any negative or unexpected data, any delay in our anticipated timelines for filing for regulatory approval, or a significant advancement of a competitor, may cause our stock price to decline significantly and may have an adverse impact on our business, financial condition and prospects. In addition, clinical trial results are frequently susceptible to varying interpretations that may delay, limit or prevent regulatory approvals. There is no assurance that data from our clinical trials will support filings for regulatory approval of any of our pipeline product candidates, or even if approved, that our product candidates will become commercially successful for all approved indications. In addition, we may experience significant setbacks in our advanced clinical trials, even after promising results in earlier trials, including unexpected adverse events. Any deficiencies in our clinical trial operations or other unexpected adverse events impacting such trials could cause increased costs, program delays or both, which may harm our business. If any of our pipeline product candidates fail at any stage of development, or we otherwise determine to discontinue development of our product candidates, we will not have the anticipated revenues from that product, and we may not receive any return of our investment on it. Consequently, our stock price could decline significantly and there could be an adverse impact on our business, financial condition, results of operations and prospects. 27 Table of Contents For example, we announced the submission of an NDA for poziotinib for use in patients with previously treated locally advanced or metastatic non- small cell lung cancer with HER2 exon 20 insertion mutations in December 2021. In February of 2022, we announced that the FDA accepted the NDA, provided a PDUFA action date of November 24, 2022, and reiterated the importance of having the confirmatory trial substantially enrolled at the time of approval and requested additional information around dosing. On September 22, 2022, we met with the FDA’s ODAC. The ODAC committee voted 9 (no) – 4 (yes) that the current benefits of poziotinib did not outweigh its risks. On November 25, 2022, we announced that we had received a Complete Response Letter (“CRL”) from the FDA regarding our NDA, indicating that the NDA could not be approved in its present form and that based on the CRL, we would have to generate additional data including a randomized controlled study prior to approval. We also announced that we are de-prioritizing poziotinib program activities. If we are unable to obtain approval for the poziotinib NDA, or any of our other future pipeline products, our business, prospects, operating results, and financial condition will be materially harmed. Clinical trials may fail to demonstrate the safety and efficacy of our product candidates, which could prevent or significantly delay obtaining regulatory approval. Prior to receiving approval to commercialize any of our product candidates, we must demonstrate with substantial evidence from well-controlled clinical trials, and to the satisfaction of the FDA, and other regulatory authorities in the U.S. and other countries, that our product candidates are both safe and effective. For each product candidate, we will need to demonstrate its efficacy and monitor its safety throughout the process. If such development is unsuccessful, our business and reputation would be harmed and our stock price would be adversely affected. Each clinical trial requires investment of substantial financial and personnel resources. The commencement and completion of a clinical trial may be delayed by various factors, including scheduling conflicts with participating clinicians and clinical institutions, difficulties in identifying and enrolling patients who meet trial eligibility criteria, failure of patients to complete the clinical trial, delays in accumulating the required number of clinical events for data analysis, delay or failure to obtain the required approval to conduct a clinical trial at a prospective site, and shortages of available drug supply. Any of our product candidates are prone to the risks of failure inherent in drug development. Clinical trials of new product candidates or for new indications sufficient to obtain regulatory marketing approval are expensive, uncertain, and take years to complete. We may not be able to successfully complete clinical testing within the time frame we have planned, or at all. Moreover, the outcome of a clinical trial is often uncertain. We may experience numerous unforeseen events during, or as a result of, the clinical trial process that could delay or prevent us from receiving regulatory approval or commercializing our product candidates. In this regard, reports of adverse events or concerns involving our product candidates could interrupt, delay or halt clinical trials of such product candidates or could result in our inability to obtain regulatory approvals for such product candidates. In addition, the results of pre-clinical studies and early-stage clinical trials of our product candidates do not necessarily predict the results of later-stage clinical trials. Later-stage clinical trials may fail to demonstrate that a product candidate is safe and effective despite having progressed through initial clinical testing. Even if we believe the data collected from clinical trials of our product candidates is promising, data are susceptible to varying interpretations, and such data may not be sufficient to support approval by the FDA or any other U.S. or foreign regulatory approval. Pre-clinical and clinical data can be interpreted in different ways. Accordingly, FDA officials could interpret such data in different ways than we or our partners do which could delay, limit or prevent regulatory approval. The FDA, other regulatory authorities, institutional review boards (“IRBs”), our contract research organizations, or we may suspend or terminate our clinical trials for our product candidates. Any failure or significant delay in completing clinical trials for our product candidates, or in receiving regulatory approval for the sale of any drugs or biologics resulting from our product candidates, may severely harm our business and reputation and may cause our stock price to decline. Even if we receive FDA and other regulatory approvals, our products may later exhibit adverse effects that may limit or prevent their widespread use, may cause the FDA to revoke, suspend or limit their approval, or may force us to withdraw products derived from those drug products from the market. Furthermore, there is the risk that additional post-marketing requirements may be imposed by the FDA in the future on our products. Moreover, the commencement and completion of clinical trials may be delayed by many factors that are beyond our control, including: • delays obtaining regulatory approval to commence a trial; • delays in reaching agreement on acceptable terms with CROs and clinical trial sites; • delays in obtaining IRB approval at each site; 28 Table of Contents • slower than anticipated patient enrollment or our inability to recruit and enroll patients to participate in clinical trials for various reasons, including the COVID-19 pandemic; • our inability to retain patients who have initiated a clinical trial; • scheduling conflicts with participating clinicians and clinical institutions; • lack of funding to start or continue the clinical trial, including as a result of unforeseen costs due to enrollment delays, requirements to conduct additional trials and studies and increased expenses associated with our CROs and other third parties; • negative or inconclusive results; • deficiencies in the conduct of the clinical trial, including failure to conduct the clinical trial in accordance with regulatory requirements, GCP, or clinical protocols; • deficiencies in the clinical trial operations or trial sites resulting in the imposition of a clinical hold; • patient noncompliance with the protocol; • adverse medical events or side effects experienced by patients during the clinical trials as a result of or resulting from the clinical trial treatments; • fatalities or other adverse events arising during a clinical trial due to medical problems that may not be related to clinical trial treatments; • our ability to sustain the quality or stability of the applicable product candidate in compliance with acceptable standards; • our inability to produce or obtain sufficient quantities of the applicable product candidate to complete the clinical trials; • changes in governmental regulations or administrative actions that adversely affect our ability to continue to conduct or complete clinical trials; • negative or problematic FDA inspections of our clinical operations or manufacturing operations; and • real or perceived lack of effectiveness or safety. We could encounter delays if a clinical trial is suspended or terminated by us, the IRBs of the clinical trial sites in which such trials are being conducted, or by the FDA or other regulatory authorities. Such authorities may impose such a suspension or termination due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial. Any delays, interruptions or halts in our clinical trials involving any of our product candidates or other adverse events negatively impacting our ability to obtain regulatory approvals for such product candidates in a timely manner could adversely affect our overall profitability, results of operations and financial condition and prospects. Although we generate revenue from commercial sales, there is no guarantee of future commercial sales and any future commercial sales may not be sufficient to sustain our business operations. We generate revenue from commercial sales for ROLVEDON. There is no guarantee that we will be able to generate future revenue and it is possible we may generate no revenue if, among other reasons, our suppliers encounter manufacturing problems, our product causes undesirable side effects, or the FDA limits or otherwise prohibits the commercial sale of ROLVEDON in the future. In addition, any future commercial sales of ROLVEDON may not be sufficient to sustain our business operations. We do not have approval from the FDA for the commercial sale of poziotinib and we do not generate any revenue from poziotinib or any other pipeline product candidate. We will not generate any future revenue from our pipeline product candidates, including poziotinib, until there is approval for commercial sale by the FDA and/or other regulatory agencies. There is no guarantee as to when, if ever, our pipeline products will be approved for commercial sale. Accordingly, we may need to raise additional capital to fund our business operations. To the extent that additional capital is raised through the sale of equity or convertible debt securities, it could result in further dilution to our stockholders and adversely impact our stock price. 29 Table of Contents A significant portion of our revenue has historically been derived from a limited number of distributors - and is expected to persist for our commercial product and in-development product candidates upon potential FDA approval. We expect that a significant portion of our future revenue will depend on sales to a limited number of distributors. Any distributors we may use comprise a significant part of the distribution network for pharmaceutical products in the U.S. and a small number of large distributors and wholesalers control a significant share of the market, which can increase competitive and pricing pressures on pharmaceutical manufacturers, including us. In addition, wholesalers may apply pricing pressure through their fee-for-service arrangements. Any reduction in the prices we receive for our products could adversely impact our revenues and financial condition. In addition, any individual distributor could choose to stop selling our product at any time, and without notice. If we lose our relationship with any of our future significant distributors, we would experience disruption and delays in marketing our products and could also experience declines in our revenues, which in turn could materially adversely impact our financial condition. COVID-19 and other pandemics, epidemics, or outbreaks of a contagious illness could materially and adversely impact or disrupt our business and our financial condition, results of operations, cash flows and performance. COVID-19, the further spread of COVID-19, additional coronavirus outbreaks, or other pandemics, epidemics, or outbreaks of a contagious illness, and similar events, may have an adverse effect on our business and financial condition. The impacts may include, but would not be limited to: • Disruption to operations due to the unavailability of employees due to illness, quarantines, risk of illness, travel restrictions or factors that limit our existing or potential workforce; • Increased cyber security risks due to remote working environment; • Limitations to the availability of our key personnel due to travel restrictions; • Elevated employee turnover, which may increase payroll expense and recruiting-related expenses; • Delays in the initiation and enrollment of clinical trials; • Supply chain disruptions, which could impair our ability to continue our research and development activities; and • Significant disruption of the global financial markets, which could have a negative impact on our ability to access capital in the future. The extent of the adverse impact of COVID-19 or any other public health outbreak on our operations will depend on the extent and severity of the continued spread of the disease globally, the timing and nature of actions taken to respond to it and the resulting economic consequences. Ultimately, efforts to mitigate the impact of COVID-19 or any other public health outbreak may not completely prevent our business from being adversely affected and future impacts remain uncertain. Reports of adverse events or safety concerns involving our commercial product, in-development product candidates or similar agents, could delay or prevent us from obtaining or maintaining regulatory approval or negatively impact sales. Our commercial product or in-development product candidates may cause SAEs. In addition to the risks associated with known SAEs, discovery of previously unknown problems with a product or product candidate, including adverse events of unanticipated severity or frequency, could interrupt, delay or halt clinical trials of such product or product candidate, including the FDA-required post-approval studies, and could result in the FDA or other regulatory authorities denying or withdrawing approval of our products for any or all indications. The FDA, other regulatory authorities or we may suspend or terminate clinical trials at any time. We may also be required to update the package inserts based on reports of adverse events or safety concerns or implement a REMS, which could adversely affect such product’s acceptance in the market. In addition, the public perception of our product and product candidates might be adversely affected, which could harm our business and results of operations and cause the market price of our common stock to decline, even if the concern relates to another company’s product or product candidate. Our planned trials to demonstrate efficacy in a variety of indications and to better manage side effect profiles of certain of our product and product candidates may not be successful and there are no assurances that patients receiving our product or product candidates will not experience SAEs in the future. Future reports of SAEs or safety concerns involving any of our product or product candidates could adversely affect our business, results of operations and prospects. 30 Table of Contents The pharmaceutical and biotechnology industries are intensely competitive. We are aware of several competitors attempting to develop and market products competitive to our commercial product and in-development product candidates, which may reduce or eliminate our commercial opportunities in the future. The pharmaceutical and biotechnology industries are intensely competitive and subject to rapid and significant technological changes. A number of companies are pursuing the development of pharmaceuticals and products that target the same diseases and conditions that our commercial product and pipeline product candidates target. We cannot predict with accuracy the timing or impact of the introduction of potentially competitive products or their possible effect on our future sales. Certain potentially competitive products to our commercial and in-development product candidates are in various stages of development, some of which have pending applications for approval with the FDA or have been approved by regulatory authorities in other countries. Also, there are many ongoing studies with currently marketed products and other investigational products, which may yield new data that could adversely impact the use of our commercial product or upon potential FDA approval of any of our pipeline product candidates. Our in-development product candidates or future product candidates may become obsolete before we recover the expenses incurred in their development. The introduction of competitive products or the development of technological advances that compete with our product or product candidates could significantly reduce anticipated future sales, which, in turn would adversely impact our financial and operating results. We are highly dependent upon Hanmi, as the sole supplier for ROLVEDON drug substance. In February 2018, we entered into a non-exclusive supply agreement with Hanmi which was amended and restated in December 2019 and further amended and restated in January 2022, through which Hanmi manufactures and supplies drug substance for ROLVEDON. Hanmi manufactures the ROLVEDON drug substance at its facility in South Korea. As Hanmi is our only approved ROLVEDON drug substance manufacturer and the production of all of our ROLVEDON drug substance is at a single location, we are exposed to the risk that Hanmi’s facility may be harmed or rendered inoperable by natural or man-made disasters or pandemics, which could render it difficult or impossible for Hanmi to perform its manufacturing activities for some time. At this time there are no plans to establish a redundant manufacturing facility to reduce this risk. If there is a supply deficiency, Hanmi is required to notify us of the deficiency and, in such circumstances, we are required under the supply agreement to work with Hanmi to cure its supply failure. Furthermore, if Hanmi fails to comply with applicable regulatory requirements and maintain the FDA clearances related to the manufacturing of the drug substance, we may be unable to maintain commercial supply of ROLVEDON on a timely basis, or at all. If Hanmi is unable to supply the drug substance to manufacture ROLVEDON reliably and at the levels we anticipate or that are required by the market, we may be unable to approve a substitute drug substance manufacturer on a timely basis, if at all. Our ability to sell ROLVEDON commercially depends, in part, on our ability to obtain such drug substance in accordance with regulatory requirements and in sufficient quantities for commercial supply. As such, we are highly dependent upon Hanmi’s continued ability to supply drug substance at the levels we require. If Hanmi is unable to supply ROLVEDON drug substance at the levels we require, this could have a material adverse effect on our business, financial condition and results of operations and adversely affect our ability to satisfy demand for ROLVEDON, which could materially adversely affect our product sales and operating results. Our supply of APIs and drug products is and will remain dependent upon the production capabilities of CMOs and other third-parties for related supplies and logistical services. Some of these vendors are based overseas. If our CMOs and other suppliers are not able to meet our requirements or the requirements of the FDA, we may be unable to obtain approval for our product candidates. Even if we do obtain approval for our product candidates, we may be limited in our ability to meet demand for our products, ensure regulatory compliance, or maximize profit on the future sale of our products. Any manufacturing related disruptions could create significant demand on our limited capital resources, and there can be no assurance that we would be able to continue as a going concern. In addition, our dependence on these ex-U.S. vendors also subjects us to business interruption risks related to COVID-19, and/or similar outbreaks, which could have a material adverse impact on us. 31 Table of Contents We have no internal manufacturing capacity for APIs or our drug products. We therefore have entered into agreements with CMOs and other suppliers to supply us with APIs and our finished drug products. Success in the development and marketing of our product and product candidates depends, in part, upon our ability to maintain, expand and enhance these existing relationships and establish new sources of supply. The manufacture of APIs and finished drug products, including the acquisition of compounds used in the manufacture of the finished drug products, may require considerable lead times. We have little or no control over the production processes of third-party manufacturers, CMOs or other suppliers. Some of the third-party manufacturing facilities used in the production of APIs and our drug products are located outside of the U.S. and require FDA approval, which our third-party manufacturers may have limited experience with obtaining. Our CMOs and other suppliers are subject to inspection by the FDA and may receive observations that they may not be able to resolve in a timely or effective manner, which could impact whether our products can be approved on a timely basis, if at all, or in the case of commercial product, whether it can continue to be commercially sold. The manufacture of pharmaceutical products requires significant expertise and capital investment, including the development of manufacturing and testing techniques, process controls, and scaling of production to meet commercial requirements. Manufacturers of pharmaceutical products often encounter difficulties during preparation for production, including technical challenges production costs, yields, quality control and assurance. If manufacturing deficiencies are noted by the FDA at any of the manufacturing facilities utilized in our products, there can be no assurance that we, or our CMOs, can resolve these manufacturing deficiencies on a timely basis, if at all. Any manufacturing-related disruptions could create significant demand on our limited capital resources, and there can be no assurance that we would be able to continue as a going concern. Our ability to source APIs and drug products is also dependent on providers of logistical services who may be subject to disruptions that we cannot predict or sufficiently plan around. Accordingly, while we do not currently anticipate shortages of supply, circumstances could arise in which we will not have adequate supplies to timely meet our requirements or market demand for a particular drug product could outstrip the ability of our supply source to timely manufacture and deliver the product, thereby causing us to lose sales. In addition, our ability to make a profit on the sale of our drug products depends on our ability to obtain favorable pricing for these arrangements. If problems arise during the manufacture of a batch of our product or product candidates, that batch of product may have to be discarded. This could, among other things, lead to increased costs, lost revenue, damage to customer relations, time and expense spent investigating the cause of the problem and, depending on the cause, similar losses with respect to other batches or products. If problems are not discovered before the product is released to the market, recall and product liability costs may also be incurred. To the extent that one of our suppliers experiences significant manufacturing problems, this could have a material adverse effect on our revenues and profitability. Reliance on CMOs entails risks to which we would not be subject if we manufactured products ourselves, including reliance on the third party for regulatory compliance and adherence to the FDA’s cGMP requirements, the possible breach of the manufacturing agreement by the CMO and the possibility of termination or non-renewal of the agreement by the CMO, based on its own business priorities, at a time that is costly or inconvenient for us. Additionally, if any CMO with whom we contract fails to perform its obligations, we may be forced to manufacture the materials ourselves, for which we may not have the capabilities or resources, or enter into an agreement with a different CMO, which we may not be able to do on reasonable terms, if at all. In either scenario, our clinical trials or commercial distribution could be delayed significantly as we establish alternative supply sources. In some cases, the technical skills required to manufacture our product or product candidates may be unique or proprietary to the original CMO and we may have difficulty, or there may be contractual restrictions prohibiting us from, transferring such skills to a back-up or alternate supplier, or we may be unable to transfer such skills at all. In addition, if we are required to change CMOs for any reason, we will be required to verify that the new CMO maintains facilities and procedures that comply with quality standards and with all applicable regulations. We will also need to verify, such as through a manufacturing comparability study, that any new manufacturing process will produce our product according to the specifications previously submitted to or approved by the FDA or another regulatory authority. The delays associated with the verification of a new CMO could negatively affect our ability to develop product candidates or commercialize our products in a timely manner or within budget. Furthermore, a CMO may possess technology related to the manufacture of our product candidates that such CMO owns independently. This would increase our reliance on such CMO or require us to obtain a license from such CMO in order to have another CMO manufacture our products or product candidates. In addition, in the case of the CMOs that supply our product candidates, changes in manufacturers often involve changes in manufacturing procedures and processes, which could require that we conduct bridging studies between our prior clinical supply used in our clinical trials and that of any new manufacturer. We may be unsuccessful in demonstrating the comparability of clinical supplies which could require the conduct of additional clinical trials. 32 Table of Contents Before we can obtain marketing approval for our drug products, our CMO facilities must be approved by the FDA and typically pass a pre-approval inspection. In order to obtain FDA approval, the FDA must conclude that all of the suppliers’ manufacturing methods, equipment and processes comply with cGMP requirements. The cGMP requirements govern organization and personnel, buildings and facilities, equipment, control of components and drug product containers and closures, production and process controls, packaging and labeling control, holding and distribution, laboratory controls, records and reports, and returned and salvaged drug products. In addition, our CMOs will be subject to on-going periodic inspection by the FDA and corresponding state and foreign agencies for compliance with their cGMP requirements, regulations and other regulatory standards. We do not have control over our CMOs’ compliance with these regulations and standards. Any failure of our third party manufacturers or us to comply with applicable regulations, including an FDA pre-approval inspection, periodic on-going inspection by the FDA and cGMP requirements, could result in sanctions being imposed on them or us, including warning letters, fines, injunctions, civil penalties, failure of regulatory authorities to grant marketing approval of our products, delay, suspension or withdrawal of approvals, license revocation, seizures or recalls of product, operation restrictions and criminal prosecutions, any of which could significantly and adversely affect our business. Finally, our business could be adversely impacted by the effects of the COVID-19 pandemic, or by other public health emergencies. We source some of our APIs and other materials from Asia, including China and South Korea. Due to our current reliance on these vendors for ROLVEDON and poziotinib supply, we risk disruption in our supply chain (including restrictions on export or shipment), depending on the severity of the coronavirus outbreak and the potential government restrictions placed on our vendors or their transports. If our suppliers fail to deliver materials and services needed for commercial manufacturing in a timely and sufficient manner or fail to comply with applicable regulations, and if we fail to timely identify and qualify alternative suppliers, our business, financial condition and results of operations would be harmed and the market price of our common stock and other securities could decline. We must rely on all of our suppliers to comply with relevant regulatory and other legal requirements, including the production of API in accordance with the FDA’s cGMP for drug products. Although we conduct our own inspections and review and/or approve investigations of each supplier, there can be no assurance that the FDA, upon inspection, would find that the supplier is complying with the cGMP requirements, where applicable. If a supplier fails to comply with these requirements or the comparable requirements in foreign countries, regulatory authorities may subject them or us to regulatory action, including criminal prosecutions, fines and suspension of the manufacture of our products. If we are required to find a new or additional supplier, we will need to evaluate that supplier’s ability to provide material that meets regulatory requirements, including cGMP requirements, as well as our specifications and quality requirements, which would require significant time and expense and could delay the production of our product and product candidates. In general, if any of our suppliers is unwilling or unable to meet its supply obligations or if we encounter delays or difficulties in our relationships with manufacturers or suppliers, and we are unable to secure an alternative supply source in a timely manner and on favorable terms, our business, financial condition, and results of operations may be harmed and the market price of our common stock may decline. Sales of ROLVEDON and future product candidates depend on coverage and reimbursement from third-party payers and a failure to obtain or a reduction in the coverage and/or reimbursement for our products could have a material adverse effect on our product sales, business and results of operations. Sales of ROLVEDON and future product candidates are dependent on the availability and extent of coverage and reimbursement, or level of reimbursement, from third-party payers, including government programs and private insurance plans. Governments and private payers may regulate prices, reimbursement levels and/or access to our products to contain costs or to affect levels of use. We rely in large part on the reimbursement of our products through government programs such as Medicare and Medicaid in the U.S., and a failure to obtain or a reduction in the coverage and/or reimbursement for our products could have a material adverse effect on our product sales, business and results of operations. A substantial portion of our U.S. business is expected to rely on reimbursement from the U.S. federal government under Medicare Part B coverage. Most of our products furnished to Medicare beneficiaries in both a physician office setting and hospital outpatient setting will be reimbursed under the Medicare Part B Average Sales Price (“ASP”) payment methodology. ASP-based reimbursement of our products under Medicare may be below or could fall below the cost that some medical providers pay for such products, which could materially and adversely affect sales of our products. We also face risks relating to the reporting of pricing data that affect the U.S. reimbursement of and discounts for our products. ASP data are calculated by the manufacturer based on a formula defined by statute and regulation and are then submitted to the Centers for Medicare & Medicaid Services (“CMS”), the agency responsible for administering the Medicare program, on a quarterly basis. 33 Table of Contents CMS uses those ASP data to determine the applicable reimbursement rates for our products under Medicare Part B. However, the statute, regulations and CMS guidance do not define specific methodologies for all aspects of the reporting of ASP data. For example, CMS has not provided specific guidance regarding administrative fees paid to group purchasing organizations (each a “GPO” and, collectively “GPOs”) in the ASP calculation. CMS directs that manufacturers make “reasonable assumptions” in their calculation of ASP data in the absence of specific CMS guidance on a topic. As a result, we are required to apply our reasonable judgment to certain aspects of calculating ASP data. If our submitted ASP data are incorrect, we may become subject to substantial fines and penalties or other government enforcement actions, which could have a material adverse impact on our business and results of operations. A breakdown or breach of our information technology systems and cybersecurity efforts could subject us to liability, reputational damage or interrupt the operation of our business. We rely upon our sophisticated information technology systems and infrastructure to operate our business. In the ordinary course of business, we collect, store and transmit large amounts of confidential information (including, but not limited to, personal information and intellectual property), and we deploy and operate an array of technical and procedural controls to maintain the confidentiality and integrity of such confidential information. Data privacy breaches by those who access our systems, whether by employees or others, may pose a risk that sensitive data, including intellectual property, trade secrets or personal information belonging to us, our patients, employees, customers or other business partners, may be exposed to unauthorized persons or to the public or otherwise used for unauthorized purposes. We could also experience a business interruption, noncompliance with data privacy laws, theft of confidential information, or reputational damage from industrial espionage attacks, malware or other cyber-attacks, which may compromise our system infrastructure or lead to data leakage, either internally or at our third-party providers. Such attacks are of ever-increasing levels of sophistication, frequency and intensity, and have become increasingly difficult to detect. There can be no assurance that our efforts to protect our data and information technology systems will prevent breakdowns or breaches in our systems (or that of our third-party providers). Any such interruption or breach of our systems or improper use of confidential data could adversely affect our business operations, financial condition, and/or result in the loss of critical or sensitive confidential information or intellectual property, and could result in financial, legal, business and reputational harm to us. We are also subject to various laws and regulations globally regarding privacy and data protection, including laws and regulations relating to the collection, storage, handling, use, disclosure, transfer and security of personal data. The legislative and regulatory environment regarding privacy and data protection is continuously evolving and developing and the subject of significant attention globally. We are subject to the EU’s General Data Protection Regulation, which became effective in May 2018, and the California Consumer Privacy Act of 2018, which became effective in January 2020, each of which contemplate substantial penalties. Failure to comply with these laws could result in significant penalties and could have a material adverse effect on our business and results of operations. Our dependence on key executives, scientists and sales and marketing personnel could impact the development and management of our business. We are highly dependent upon our ability to attract and retain qualified scientific, technical sales and marketing and managerial personnel. There is intense competition for qualified personnel in the pharmaceutical and biotechnology industries, and we cannot be sure that we will be able to continue to attract and retain the qualified personnel necessary, particularly as business prospects change, for the development and management of our business. Although we do not believe the loss of one individual would materially harm our business, our business might be harmed by the loss of the services of multiple existing personnel, as well as the failure to recruit additional key scientific, technical and managerial personnel in a timely manner. Much of the know-how we have developed resides in our scientific and technical personnel and is not readily transferable to other personnel. We do not have employment agreements with most of our key scientific, technical, or managerial employees, though we have employment agreements with each of our named executive officers. Furthermore, our common stock is currently trading at a price below the exercise price of most of our outstanding stock options. As a result, these “underwater” options are less useful as a motivation and retention tool for our existing employees. A significant portion of our revenue has historically been derived from a limited number of distributors - and is expected to persist for our commercial and in-development drugs upon potential FDA approval. A significant portion of our revenue is derived from a limited number of distributors and we expect that a significant portion of our future revenue will depend on sales to a limited number of distributors. Any distributors we may use comprise a significant part of the distribution network for pharmaceutical products in the U.S. and a small number of large distributors and wholesalers control a significant share of the market, which can increase competitive and pricing pressures on pharmaceutical manufacturers, including us. In addition, wholesalers may apply pricing pressure through their fee-for- service arrangements. 34 Table of Contents Any reduction in the prices we receive for our products could adversely impact our revenues and financial condition. In addition, any individual distributor could choose to stop selling some or all of our products at any time, and without notice. If we lose our relationship with any of our future significant distributors, we would experience disruption and delays in marketing our products and could also experience declines in our revenues, which in turn could materially adversely impact our financial condition. Our efforts to acquire or in-license and develop additional products and product candidates may fail and/or our in-licensed products and product candidates may fail to perform as we anticipate, which might limit our ability to grow our business. To remain competitive and grow our business, our long-term strategy includes the acquisition or in-license of additional products and product candidates. We are actively seeking to acquire, or in-license, additional commercial products as well as product candidates that have demonstrated positive pre-clinical and/or clinical data. We have certain criteria that we are looking for in any asset acquisition and in-license and we may not be successful in locating and acquiring, or in-licensing, additional desirable products or product candidates on acceptable terms. To accomplish our acquisition and in-license strategy, we intend to commit efforts, funds and other resources to research and development and business development. Even with acquired and in-licensed products and product candidates, a high rate of failure is inherent in the development of such products and product candidates. We must make ongoing substantial expenditures without any assurance that our efforts will be commercially successful. Failure can occur at any point in the process, including after significant funds have been invested. For example, promising new product candidates may fail to reach the market or may only have limited commercial success because of efficacy or safety concerns, failure to achieve positive clinical outcomes, inability to obtain necessary regulatory approvals, limited scope of approved uses, excessive costs to manufacture, the failure to establish or maintain intellectual property rights, limited payer coverage or infringement of the intellectual property rights of others. In addition, many other large and small companies within the pharmaceutical and biotechnology industry seek to establish collaborative arrangements for product research and development, or otherwise acquire product candidates in late-stage clinical development, in competition with us. We face additional competition from public and private research organizations, academic institutions and governmental agencies in establishing collaborative arrangements for product candidates in late-stage clinical development. Many of the companies and institutions that compete against us have substantially greater capital resources, research and development staffs and facilities than we have, and greater experience in conducting business development activities. These entities represent significant competition to us as we seek to expand our portfolio through the in-license or acquisition of compounds. Finally, while it is not feasible to predict the actual cost of acquiring and developing additional products and product candidates, that cost could be substantial and we may need to obtain additional financing for such purpose, which may further dilute existing stockholders. Our business depends upon the continued customer support efforts of distributors. In the U.S., we expect to continue to sell our product and, if approved, our product candidates to a small number of distributors who in turn will sell- through to patient health care providers. These distributors also provide multiple logistics services relating to the distribution of products, including transportation, warehousing, cross-docking, inventory management, packaging and freight-forwarding. We will not promote our product or, if approved, our product candidates to these distributors and they do not set or determine demand for products. The use of distributors involves certain risks, including, but not limited to, risks that these distributors will: • not provide us with accurate or timely information regarding their inventories, the number of patients who are using our product or complaints about our product; • not purchase sufficient inventory on hand to fulfill end user orders in a timely manner; • be unable to satisfy financial obligations to us or others; and • cease operations. Any such actions may result in decreased sales of our product and, if approved, our product candidates which would harm our business, financial condition or results of operations. Adverse economic conditions may have material adverse consequences on our business, results of operations and financial condition as well as our ability to raise additional capital. 35 Table of Contents Unpredictable and unstable changes in economic conditions, including recession, inflation, liquidity constraints, failures and instability in U.S. and international financial banking systems, increased government intervention, or other changes, may adversely affect our general business strategy. In recent years, we have funded our operations through a combination of equity and debt offerings and sales of our pharmaceutical products. Based on our current plans and expectations, we believe that we will require additional funding to achieve our goals. We may need to raise these additional funds through public or private debt or equity financings, and any adverse economic conditions could adversely affect our ability to raise funds. If our business deteriorates, we may not be able to maintain compliance with any covenants or representations and warranties in any such financings, which could result in reduced availability of such financings, an event of default under such financings, or could make other sources of financing unavailable to us. Any such event would have a material adverse impact on our business, results of operations and financial condition. While we believe we have adequate capital resources to meet our current working capital and capital expenditure requirements for at least the next twelve months, an economic downturn or an increase in our expenses could require us to seek additional financing on less than attractive rates or on terms that are excessively dilutive to existing stockholders. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to delay or abandon clinical development plans or plans to acquire additional technology. Volatile economic conditions may not only limit our access to capital, but may also make it difficult for our customers and us to accurately forecast and plan future business activities, and they could cause businesses to slow spending on our products, which would delay and lengthen future sales cycles. Furthermore, during challenging economic times, our customers may face issues gaining timely access to sufficient credit, which could result in an impairment of their ability to make timely payments to us. In addition, adverse economic conditions could also adversely impact our suppliers’ ability to provide us with materials which would negatively impact on our business, financial condition, and results of operations. Our indebtedness may limit our flexibility in operating our business and adversely affect our financial health and competitive position. As of December 31, 2022, we had $30.0 million of indebtedness outstanding under our loan agreement with SLR Investment Corp. (“SLR”) that matures in September 2027. To service this indebtedness and any additional indebtedness we may incur in the future, we need to generate cash from our operating activities. Our ability to generate cash is subject, in part, to our ability to successfully execute our business strategy, as well as general economic, financial, competitive, regulatory, and other factors beyond our control. We cannot assure you that our business will be able to generate sufficient cash flow from operations or that future borrowings or other financings will be available to us in an amount sufficient to enable us to service our indebtedness and fund our other liquidity needs. To the extent we are required to use cash from operations or the proceeds of any future financing to service our indebtedness, our ability to plan for, or react to, changes in our business, industry and the economy generally will be limited. In addition, the SLR credit agreement contains certain covenants that limit our ability to engage in certain transactions that may be in our long-term best interests. Subject to certain limited exceptions, these covenants limit our ability to, among other things: • create, incur, assume, or be liable for any additional indebtedness, or create, incur, allow, or suffer any lien; • effect certain changes in our business, management, ownership, or business locations; • merge or consolidate, or acquire all or substantially all of the capital stock or shares or any property of another company; • declare or pay any dividends, make any other distribution or payment in respect of or redeem, retire or purchase any shares of our capital stock; • make certain investments; and • enter into transactions with our affiliates. We have not previously breached and are not currently in breach of these or any of the other covenants; however, there can be no guarantee that we will not breach these covenants in the future. In the event that we breach one or more covenants, our lender may choose to declare an event of default and require that we immediately repay all amounts outstanding, terminate any commitment to extend further credit and foreclose on the collateral granted to it to collateralize such indebtedness. The 36 Table of Contents occurrence of any of these events could have a material adverse effect on our business, financial condition and results of operations and our ability to continue as a going concern. Rising inflation rates could negatively impact our revenues and profitability if increases in the prices of our product and product candidates or a decrease in consumer spending results in lower sales. In addition, if our costs increase and we are not able to pass along these price increases to our customers, our net income would be adversely affected, and the adverse impact may be material. Inflation rates, particularly in the United States, have increased recently to levels not seen in years. Increased inflation may result in decreased demand for our commercial product, increased operating costs (including our labor costs), reduced liquidity, and limitations on our ability to access credit or otherwise raise debt and equity capital. In addition, the United States Federal Reserve has raised, and may again raise, interest rates in response to concerns about inflation. Increases in interest rates, especially if coupled with reduced government spending and volatility in financial markets, may have the effect of further increasing economic uncertainty and heightening these risks. In an inflationary environment, we may be unable to raise the sales prices of our commercial product at or above the rate at which our costs increase, which could have a material adverse effect on our financial condition and results of operations. We also may experience lower than expected sales and potential adverse impacts on our competitive position if there is a decrease in consumer spending or a negative reaction to our pricing. A reduction in our revenue would be detrimental to our profitability and financial condition and could also have an adverse impact on our future growth. Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties, could adversely affect our current and projected business operations and financial condition and results of operations. Events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. Most recently, on March 10, 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver. Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp. were each swept into receivership. Although a statement by the Department of the Treasury, the Federal Reserve and the FDIC indicated that all depositors of SVB would have access to all of their money after only one business day of closure, including funds held in uninsured deposit accounts, borrowers under credit agreements, letters of credit and certain other financial instruments with SVB, Signature Bank or any other financial institution that is placed into receivership by the FDIC may be unable to access undrawn amounts thereunder. Even though we assess our banking and customer relationships as we believe necessary or appropriate, our access to funding sources and other credit arrangements in amounts adequate to finance or capitalize our current and projected future business operations could be significantly impaired by factors that affect us, the financial services industry or economy in general. These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry. The results of events or concerns that involve one or more of these factors could include a variety of material and adverse impacts on our current and projected business operations and our financial condition and results of operations. These could include, but may not be limited to, the following: • Delayed access to deposits or other financial assets or the uninsured loss of deposits or other financial assets; • Loss of access to revolving existing credit facilities or other working capital sources and/or the inability to refund, roll over or extend the maturity of, or enter into new credit facilities or other working capital resources; • Potential or actual breach of contractual obligations that require us to maintain letters or credit or other credit support arrangements; • Potential or actual breach of financial covenants in our credit agreements or credit arrangements; • Potential or actual cross-defaults in other credit agreements, credit arrangements or operating or financing agreements; or • Termination of cash management arrangements and/or delays in accessing or actual loss of funds subject to cash management arrangements. 37 Table of Contents In addition, investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all. Any decline in available funding or access to our cash and liquidity resources could, among other risks, adversely impact our ability to meet our operating expenses, financial obligations or fulfill our other obligations, result in breaches of our contractual obligations or result in violations of federal or state wage and hour laws. Any of these impacts, or any other impacts resulting from the factors described above or other related or similar factors not described above, could have material adverse impacts on our liquidity and our business, financial condition or results of operations. We are a small company relative to our principal competitors, and our limited financial resources may limit our ability to develop and market our product and product candidates. Many companies, both public and private, including well-known pharmaceutical companies and smaller niche-focused companies, are developing products to treat many, if not all, of the diseases we are pursuing or are currently distributing drug products that directly compete with the drugs that we sell or that we intend to develop, market and distribute. Competition for branded or proprietary drugs is less driven by price and is more focused on innovation in the treatment of disease, advanced drug delivery and specific clinical benefits over competitive drug therapies. We may not be successful in any or all of our current clinical studies; or if successful, and if one or more of our product candidates is approved by the FDA, we may encounter direct competition from other companies who may be developing products for similar or the same indications as our product candidates. Companies that have products on the market or in research and development that target the same indications as our in-development product candidates or new compounds sought include, among others: Amgen, Inc., Coherus BioSciences, Mylan Pharmaceuticals, Inc., Sandoz, Pfizer, AstraZeneca plc, Takeda Pharmaceutical Company Ltd., Janssen Research & Development, Taiho Pharmaceutical Co., Ltd., Cullinan Oncology, LLC, Daiichi-Sankyo Co., Ltd., Genentech, Inc., Gilead Sciences, Inc., Jiangsu Hengrui Pharmaceuticals Co., Ltd., and Novartis International AG. Many of our competitors are large and well-capitalized companies focusing on a wide range of diseases and drug indications, and have substantially greater financial, research and development, marketing, human and other resources than we do. Furthermore, large pharmaceutical companies have significantly more experience than we do in pre-clinical testing, human clinical trials and regulatory approval procedures, among other things. As a result, our competitors may be more successful than us in developing their products, obtaining regulatory approvals and marketing their products to consumers. If actual future payments for allowances for discounts, returns, rebates and chargebacks exceed the estimates we made at the time of the sale of our products, our financial position, results of operations, and cash flows may be materially and negatively impacted. On March 1, 2019, we completed the sale of the Commercial Product Portfolio (as defined below in Note 10) to Acrotech. We contractually retained all obligations related to our estimated allowances for discounts, returns, rebates and chargebacks for sales made on and prior to such date. Our former FUSILEV, MARQIBO, and BELEODAQ customers are permitted to return purchased products to us beginning at their expiration date and within six months thereafter. Our former EVOMELA customers are permitted to return purchased product to us beginning at six months prior to its expiration date, and within twelve months following its expiration date (as well as for overstock inventory, as determined by end-users). Our existing ROLVEDON customers are also permitted to return purchased product to us beginning at three months prior to its expiration date, and within twelve months following its expiration date. We authorize returns for damaged products and exchanges for expired products in accordance with our returned goods policy and procedures. Also, like our competitors, we also give credits for chargebacks to wholesale customers that have contracts with us for their sales to hospitals, GPOs, pharmacies or other retail customers. The product revenue we recognized through March 1, 2019 was net of estimated allowances for discounts, returns, rebates and chargebacks. Such estimates required subjective and complex judgment due to the need to make estimates about matters that are inherently uncertain. Based on industry practice, pharmaceutical companies, including us, have liberal return policies. A chargeback is the difference between the price the wholesaler pays us (wholesale acquisition cost, or WAC) and the price that the wholesaler’s customer pays for our product (contracted customer). Our products were subject to certain programs with federal government qualified entities whereby pricing on products is discounted to such entities and results in a chargeback claim to us, or for us to bill certain qualifying Public Health Service end-users at government-mandated pricing. To the extent that our sales to discount purchasers, such as federal government qualified entities, increases, chargeback claims will also 38 Table of Contents increase. There may be significant lag time between our original sale to the wholesaler and our receipt of the corresponding government chargeback claims from our wholesalers. Our products are subject to state government-managed Medicaid programs, whereby rebates for purchases are issued to participating state governments. These rebates arise when the patient treated with our products is covered under Medicaid. Our calculations require us to estimate end-user and patient mix to determine which of our sales will likely be subject to these rebates. There is a significant time lag in us receiving these rebate notices (generally several months after our sale is made). Our estimates are based on our historical claims from participating state governments, as supplemented by management’s judgment. Our products are also subject to the Medicare Part B program, under which reimbursement for drugs is based on a drug’s average sales price, or ASP, which is calculated net of virtually all discounts and rebates. Manufacturers report ASP to CMS on a quarterly basis. Also under Medicare Part B, since October 1, 2022, manufacturers are required to pay rebates to the government to the extent that drug prices increase faster than inflation. There may be a time lag in our receiving inflation rebate notices. Although we believe that we have sufficient allowances, actual results may differ significantly from our estimated allowances for discounts, returns, rebates and chargebacks. Changes in estimates and assumptions based upon actual results may have a material impact on our financial condition, results of operations and cash flows. Such changes to estimates will be made to the financial statements in the year in which the estimate is changed. In addition, our financial position, results of operations and cash flows may be materially and negatively impacted if actual future payments for allowances, discounts, returns, rebates and chargebacks exceed the estimates we made at the time of the sale of our products. Our business strategy requires that we engage in transactions that increase our capital requirements, cause us to incur debt or assume contingent liabilities, and possibly dilute our stockholders. We actively evaluate various strategic transactions on an ongoing basis, including licensing or otherwise acquiring complementary products, technologies or businesses. Any potential acquisitions or in-licensing transactions may entail numerous risks, including but not limited to: • risks associated with satisfying the closing conditions relating to such transactions and realizing their anticipated benefits; • increased operating expenses and cash requirements; • difficulty in conforming standards, procedures and policies, business cultures and compensation structures; • difficulty integrating acquired technologies, products and personnel with our existing business; • difficulty conforming acquired operations, such as corporate and administrative functions, sales and marketing, or information technology and accounting systems with our existing business; • diversion of management’s attention in connection with both negotiating the acquisition or license and integrating the business, technology or product; • retention of key employees; • uncertainties in our ability to maintain key business relationships of any acquired entities; • strain on managerial and operational resources; • exposure to regulatory, compliance and legal risks of the acquired entities; • tax costs or inefficiencies associated with integrating operations; • modifications to operating control standards to comply with the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder; • difficulty coordinating geographically dispersed organizations; • exposure to unforeseen liabilities of acquired companies or products or companies or products in which we invest; and • potential costly and time-consuming litigation, including stockholder lawsuits. As a result of these or other problems and risks, businesses, technologies or products we acquire or invest in or obtain licenses to may not produce the revenues, earnings or business synergies that we anticipated. In addition, acquired or licensed products may not perform as expected or we may not obtain necessary regulatory approvals on our anticipated timeline or at all. 39 Table of Contents Accordingly, we may incur higher costs and realize lower revenues than we had anticipated. We cannot assure you that any acquisitions or investments we have made or may make in the future will be completed or that, if completed, the acquired business, licenses, investments, products, or technologies will generate sufficient revenue to offset the negative costs or other negative effects on our business. Failure to effectively manage our growth through acquisition or in-licensing transactions could adversely affect our growth prospects, business, results of operations, financial condition, and cash flow. In addition, in connection with acquisitions and in-licensing transactions, we may spend significant amounts of capital, issue dilutive securities, assume or incur significant debt obligations or contingent liabilities, and acquire intangible assets that could result in significant future amortization expense and write-offs. Moreover, we may not be able to locate suitable acquisition opportunities and this inability could impair our ability to grow or obtain access to technology or products that may be important to the development of our business. Even if appropriate opportunities are available, we may not be able to successfully identify them or we may not have the financial resources necessary to pursue them, and if pursued, we may be unable to structure and execute transactions in on our anticipated timeframe, or at all. Other pharmaceutical companies, many of which may have substantially greater financial, marketing and sales resources than we do, compete with us for these opportunities. Even if we are able to successfully identify and acquire complementary products, technologies or businesses, we cannot assure you that we will be able to successfully manage the risks associated with integrating acquired products, technologies or businesses or the risks arising from anticipated and unanticipated problems in connection with an acquisition or in-licensing transaction. Further, while we seek to mitigate risks and liabilities of potential acquisitions and in-licensing transactions through, among other things, due diligence, there may be risks and liabilities that such due diligence efforts fail to discover, that are not disclosed to us, or that we inadequately assess. Any failure in identifying and managing these risks and uncertainties effectively would have a material adverse effect on our business. Additionally, actual costs and sales synergies, if achieved at all, may be lower than we expect and may take longer to achieve than we anticipate. Furthermore, the products of companies we acquire may overlap with our products or those of our customers, creating conflicts with existing relationships or with other commitments that are detrimental to the integrated businesses. If we are unable to successfully integrate our acquisitions with our existing business, we may not obtain the advantages that the acquisitions were intended to create, which may materially adversely affect our business, results of operations, financial condition and cash flows, our ability to develop and introduce new products and the market price of our stock. Our collaborations with outside scientists may be subject to change, which could limit our access to their expertise. We work with scientific advisors and collaborators at research institutions. These scientists are not our employees and may have other commitments that would limit their availability to us. If a conflict of interest between their work for us and their work for another entity arises, we may lose their services, which could negatively impact our research and development activities. We may rely on CROs and other third parties to conduct clinical trials and, in such cases, we are unable to directly control the timing, conduct and expense of our clinical trials. We may rely, in full or in part, on third parties to conduct our clinical trials. In such situations, we have less control over the conduct of our clinical trials, the timing and completion of the trials, the required reporting of adverse events and the management of data developed through the trial than would be the case if we were relying entirely upon our own staff. Communicating with outside parties can also be challenging, potentially leading to mistakes as well as difficulties in coordinating activities. Outside parties may have staffing difficulties, may undergo changes in priorities or may become financially distressed, adversely affecting their willingness or ability to conduct our trials. We may experience unexpected cost increases that are beyond our control. Problems with the timeliness or quality of the work of a CRO may lead us to seek to terminate the relationship and use an alternative service provider. However, making this change may be costly and may delay our trials, and contractual restrictions may make such a change difficult or impossible. Additionally, it may be challenging or impossible to find a replacement organization that can conduct our trials in an acceptable manner and at an acceptable cost. Competition for patients in conducting clinical trials may prevent or delay product development and strain our limited financial resources. Many pharmaceutical companies are conducting clinical trials involving patients with the disease indications that our product candidates target. As a result, we must compete with them for clinical sites, physicians and the limited number of patients who fulfill the stringent requirements for participation in clinical trials. Also, due to the confidential nature of clinical trials, we do not know how many of the eligible patients may be enrolled in competing studies and who are consequently not 40 Table of Contents available to us for our clinical trials. Our clinical trials may be delayed or terminated due to the inability to enroll enough patients. Patient enrollment depends on many factors, including the size of the patient population, the nature of the trial protocol, the proximity of patients to clinical sites and the eligibility criteria for the study. The delay or inability to meet planned patient enrollment may result in increased costs and delays or termination of the trial, which could have a harmful effect on our ability to develop products. We may have conflicts with our third-party development partners that could delay or prevent the development or commercialization of our product candidates. We may have conflicts with our third-party development partners, such as conflicts concerning the interpretation of pre-clinical or clinical data, the achievement of milestones, the interpretation of contractual obligations, payments for services, development obligations or the ownership of intellectual property developed during our collaboration. If any conflicts arise with any of our third-party development partners, such partner may act in a manner that is adverse to our best interests. Any such disagreement could result in one or more of the following, each of which could delay or prevent the development or commercialization of our product candidates, and in turn prevent us from generating revenues from such product candidates: • unwillingness on the part of a third-party development 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 to cooperate in the manufacture of the product, including providing us with product data or materials; • unwillingness 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; • attempts by either party to terminate the collaboration; • our ability to maintain or defend our intellectual property rights may be compromised by our partner’s acts or omissions; • a third-party development partner may utilize our intellectual property rights in such a way as to invite litigation that could jeopardize or invalidate our intellectual property rights or expose us to potential liability; • a third-party development partner may change the focus of its development and commercialization efforts due to internal reorganizations, mergers, consolidations or otherwise; • unwillingness to fully fund or commit sufficient resources to the testing, marketing, distribution or development of our products; • unwillingness or inability to fulfill their obligations to us due to the pursuit of alternative products, conflicts of interest that arise or changes in business strategy or other business issues; and/or • we may not be able to guarantee supplies of development or marketed products. Given these risks, it is possible that any collaborative arrangements which we have or could enter into may not be successful. The potential size of the market for our product and product candidates is uncertain. We often provide estimates of the number of people who suffer from the diseases that our product and product candidates are intended to target. However, there is limited information available regarding the actual size of these patient populations. In addition, it is uncertain whether the results from previous or future clinical trials of products and product candidates will be observed in broader patient populations, and the number of patients who may benefit from our product and product candidates may be significantly smaller than the estimated patient populations. If our employees, representatives or agents fail to comply with regulatory standards and requirements, we could be exposed to financial, reputational or other harm. Our business and financial condition could be adversely affected to the extent that our employees, representatives or agents fail to: 41 Table of Contents • comply with FDA regulations or similar regulations of similar regulatory authorities in other countries; • provide accurate information to the FDA or similar regulatory authorities in other countries; • comply with manufacturing standards we, the FDA or similar authorities in other countries have established; • comply with federal and state healthcare fraud and abuse laws and regulations or similar laws and regulations • established and enforced by comparable foreign regulatory authorities; • comply with the provisions of the Foreign Corrupt Practices Act (FCPA); or • report financial information or clinical or pre-clinical data accurately. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Misconduct by our employees, representatives or agents could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. It is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent these activities may not be effective in controlling unknown or unmanaged risks or losses, or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against us, even if we are ultimately exonerated, we could incur substantial costs and expenses in an effort to defend ourselves or to assert our rights and any such actions could result in reputational harm to us or have a significant impact on our business and results of operations, including the imposition of significant fines or other sanctions. Risks Related to Our Industry The future sale of our products will be (and has historically been) subject to regulatory approvals and requirements. If we are unable to obtain regulatory approval for our product candidates, or if we fail to comply with governmental regulations, we will be limited in our ability to commercialize or sell our products and product candidates and/or will be subject to penalties. We are not permitted to market or promote any of our product candidates before we receive regulatory approval from the FDA or comparable foreign regulatory authorities, and we may never receive such regulatory approval for any of our product candidates. Obtaining regulatory approval of a new drug is an uncertain, lengthy and expensive process, and success is never guaranteed. Despite the time, resources and effort expended, failure can occur at any stage. During each stage, there is a substantial risk that we will encounter serious obstacles that will further delay us and add substantial expense, that we will develop a product with limited potential for commercial success, or that we will be forced to abandon a product in which we have invested substantial amounts of time and money. These risks may include failure of the product candidate in pre-clinical studies, difficulty enrolling patients in clinical trials, clinical trial holds or other delays in completing clinical trials, delays in completing formulation and other testing and work necessary to support an application for regulatory approval, adverse reactions to the product candidate or other safety concerns, insufficient clinical trial data to support the safety or efficacy of the product candidate or to differentiate our product candidate from competitors, an inability to manufacture sufficient quantities of the product candidate for development or commercialization activities in a timely and cost-effective manner, and failure to obtain, or delays in obtaining, the required regulatory approvals for the product candidate or the facilities in which it is manufactured. In order to receive approval from the FDA for each product candidate, we must demonstrate that the new drug product is safe and effective for its intended use and that the manufacturing processes for the product candidate comply with the FDA’s cGMPs, which include requirements related to production processes, quality control and assurance, and recordkeeping. The FDA has substantial discretion in the approval process for human medicines. 42 Table of Contents The FDA and comparable agencies in foreign countries impose many requirements related to the drug development process through lengthy and rigorous clinical testing and data collection procedures, and other costly and time consuming compliance procedures. While we believe that we are currently in compliance with applicable FDA regulations, if we or our partners, the CROs or CMOs with which we have relationships, fail to comply with the regulations applicable to our clinical testing, the FDA may delay, suspend or cancel our clinical trials, or the FDA might not accept the test results. The FDA, an institutional review board, third party investigators, any comparable regulatory agency in another country, or we, may suspend clinical trials at any time if the trials expose subjects participating in such trials to unacceptable health risks. Further, human clinical testing may not show any current or future drug product to be safe and effective to the satisfaction of the FDA or comparable regulatory agencies, or the data derived from the clinical tests may be unsuitable for submission to the FDA or other regulatory agencies. Once we submit an application seeking approval to market a drug product, the FDA or other regulatory agencies may not issue their approvals on a timely basis, if at all. If we are delayed or fail to obtain these approvals, our business and prospects may be significantly damaged. In addition, any regulatory approvals that we receive for our future product candidates may also be subject to limitations on the indicated uses for which they may be marketed or contain requirements for potentially cost prohibitive post-marketing follow-up studies and surveillance to monitor the safety and efficacy of the product. If we obtain regulatory approval for our drug products, we, our partners, our manufacturers, and other contract entities will continue to be subject to extensive requirements by a number of international, federal, state and local agencies. These regulations will impact many aspects of our operations, including testing, research and development, manufacturing, safety, effectiveness, labeling, storage, quality control, adverse event reporting, record keeping, approval, advertising and promotion of our future products. The FDA and foreign regulatory authorities strictly regulate the promotional claims that may be made about prescription products and our product labeling, advertising and promotion is subject to continuing regulatory review. Physicians may nevertheless prescribe our product to their patients in a manner that is inconsistent with the approved label, or that is off-label. The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and if we are found to have improperly promoted off-label uses we may be subject to significant sanctions, civil and criminal fines and injunctions prohibiting us from engaging in specified promotional conduct. In addition, we are subject to the federal False Claims Act (FCA), as well as the false claims laws of several states. The FCA prohibits any person from knowingly presenting, or causing to be presented, a false claim for payment to the federal government, or knowingly making, or causing to be made, a false statement to get a false claim paid. Suits filed under the FCA, known as “qui tam” actions, can be brought by any private individual on behalf of the government and such private individuals, commonly known as “whistleblowers,” may share in any amounts paid by the entity to the government in fines or settlement. The filing of qui tam actions has caused a number of pharmaceutical, medical device and other healthcare companies to have to defend a FCA action. When an entity is determined to have violated the FCA, it may be required to pay up to three times the actual damages sustained by the government, plus civil penalties for each separate false claim. Various states also have enacted laws modeled after the federal FCA. In order to comply with these laws, we have implemented a compliance program designed to identify, prevent and mitigate risk through the implementation of compliance policies and training systems. We cannot guarantee that our compliance program will be sufficient or effective, that our employees will comply with our policies, that our employees will notify us of any violation of our policies, that we will have the ability to take appropriate and timely corrective action in response to any such violation, or that we will make decisions and take actions that will necessarily limit or avoid liability for whistleblower claims that individuals, such as employees or former employees, may bring against us or that governmental authorities may prosecute against us based on information provided by individuals. If we are found to be in violation of any of the laws and regulations described above or other applicable state and federal healthcare laws, we may be subject to penalties, including civil and criminal penalties, damages, fines, disgorgement, contractual damages, reputational harm, imprisonment, diminished profits and future earnings, exclusion from government healthcare reimbursement programs such as Medicare and Medicaid, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, and/or the curtailment or restructuring of our operations, any of which could have a material adverse effect on our business, results of operations and growth prospects. Any action against us for violation of these laws or regulations, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. Moreover, achieving and sustaining compliance with applicable federal, state and foreign healthcare laws is costly and time-consuming for our management. Even if we receive regulatory approval to market our product candidates, the market may not be receptive to our product candidates upon their commercial introduction, which would negatively impact our ability to achieve profitability. Our product candidates may not gain market acceptance among physicians, patients, healthcare payers and the medical community. The degree of market acceptance of any approved products will depend on a number of factors, including: 43 Table of Contents • the effectiveness of the 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 product, both in absolute terms and relative to alternative treatments; and • sufficient third-party coverage and reimbursement. If our product candidates receive regulatory approval but do not achieve an adequate level of acceptance by physicians, healthcare payers and patients, we may not generate drug product revenues sufficient to attain profitability. In addition, we have only licensed the rights to develop and market our product candidates in limited territories. Other companies can market and sell the same products in other parts of the world upon local regulatory approvals. If negative publicity is associated with our products or similar products sold by third parties in their territories, our own efforts to successfully market and sell our products in our territories may be adversely impacted. We have received fast track designation from the FDA for poziotinib. We may seek fast track designation or other designations to expedite the development and approval of our future product candidates, and we may not be successful in receiving such designations, or if received, such designation may not actually lead to a faster development, regulatory review or approval process. The FDA may grant fast track designation to a product that is intended for the treatment of a serious or life-threatening condition and that demonstrates the potential to address unmet medical needs for this condition. Products receiving fast track designation are eligible for more frequent interaction and communication with FDA and rolling review. The FDA has broad discretion whether or not to grant this designation, so even if we believe a particular product candidate is eligible for this designation, we cannot assure you that the FDA would decide to grant it. Even if we do receive fast track designation, as we did for poziotinib, we may not experience a faster development process, review or approval compared to conventional FDA procedures. Moreover, the FDA may withdraw fast track designation if it believes that the designation is no longer supported by data from our clinical development program. There is a substantial risk of product liability claims in our business. If we are unable to obtain sufficient insurance, a product liability claim against us could adversely affect our business. Our business exposes us to significant potential product liability risks that are inherent in the development, testing, manufacturing and marketing of human therapeutic products. Product liability claims might not be fully covered by product liability insurance. In addition, product liability claims could result in an FDA investigation of the safety and effectiveness of our approved products, our manufacturing processes and facilities or our marketing programs, and potentially a recall of our products or more serious enforcement action, limitations on the approved indications for which they may be used, or suspension or withdrawal of approvals. Regardless of the merits or eventual outcome, liability claims may also result in decreased demand for our products, injury to our reputation, costs to defend the related litigation, a diversion of management’s time and our resources, substantial monetary awards to trial participants or patients and a decline in our stock price. We currently have product liability insurance that we believe is appropriate for our stage of development, including the marketing and sale of our approved product. Any insurance we have or may obtain may not provide sufficient coverage against potential liabilities. Furthermore, clinical trial and product liability insurance is becoming increasingly expensive. As a result, we may be unable to obtain sufficient insurance at a reasonable cost to protect us against losses caused by product liability claims that could have a material adverse effect on our business. Guidelines and recommendations published by various organizations can reduce the use of our product. Government agencies, such as the CMS, promulgate regulations, and issue guidelines, directly applicable to us and to our product. In addition, third parties such as professional societies, practice management groups, insurance carriers, physicians, private health/science foundations and organizations involved in various diseases from time to time may publish guidelines or recommendations to healthcare providers, administrators and payers, and patient communities. Recommendations may relate to such matters as utilization, dosage, route of administration and use of related therapies and coverage and reimbursement of our product by government and private payers. Third-party organizations like the above have made recommendations about our 44 Table of Contents product. Recommendations or guidelines that are followed by patients and healthcare providers could result in decreased utilization and/or dosage of our products, any of which could adversely affect our product sales and operating results materially. Legislative or regulatory reform of the healthcare system and pharmaceutical industry related to pricing, coverage or reimbursement may hurt our ability to sell our products profitably or at all. Our ability to commercialize any products successfully will depend in part on the availability of coverage and reimbursement from third-party payers such as government authorities, private health insurers, health maintenance organizations including pharmacy benefit managers and other health care- related organizations, in both the U.S. and foreign markets. Even if we succeed in bringing one or more products to market, the amount reimbursed for our products may be insufficient to allow us to compete effectively and could adversely affect our profitability. Coverage and reimbursement by governmental and other third-party payers may depend upon a number of factors, including a governmental or other third-party payer’s determination that use of a product includes but is not limited to: • a covered benefit under its health plan; • safe, effective and medically necessary; • appropriate for the specific patient; • cost-effective; and • neither experimental nor investigational. Obtaining coverage and reimbursement approval for a product from each third-party and governmental payer is a time-consuming and costly process that could require us to provide supporting scientific, clinical and cost-effectiveness data for the use of our products to each payer. We may not be able to provide data sufficient to obtain coverage and adequate reimbursement. The high cost of pharmaceuticals continues to generate substantial government interest. It is possible that proposals will be adopted, or existing regulations that affect the coverage and reimbursement of pharmaceutical and other medical products may change, that may impact our products currently on the market and any of our products approved for marketing in the future. Cost control initiatives could decrease the price that we receive for any of our products or product candidates. In addition, third-party payers are increasingly challenging the price and cost-effectiveness of medical products and services. Significant uncertainty exists as to the coverage and reimbursement status of newly-approved pharmaceutical products. Future developments may require us to decrease the price that we charge for our products, thereby negatively affecting our financial results. In some foreign countries, particularly in the EU, prescription drug pricing is subject to governmental control. Drug pricing may be made against a reference price set by the healthcare providers as a measure for healthcare cost containment. Pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product. If coverage and reimbursement of our products are unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels for the purpose of adoption of these products in the national health services in these jurisdictions, our profitability will likely be negatively affected. If we market our products in a manner that violates federal or state health care fraud and abuse laws, we may be subject to civil or criminal penalties, including exclusion from participation in government health care programs. As a pharmaceutical company, even though we do not provide healthcare services or receive payments directly from or bill directly to Medicare, Medicaid or other third-party payers for our product, we are subject to certain federal and state healthcare laws and regulations pertaining to fraud and abuse applicable to our business. Violations of fraud and abuse laws may be punishable by criminal and/or civil sanctions, including fines and/or exclusion or suspension from federal and state health care programs such as Medicare and Medicaid and debarment from contracting with the U.S. government. The laws that may affect our ability to operate include the federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully offering, paying, soliciting, or receiving remuneration to induce or in return for purchasing, leasing, ordering, or arranging for the purchase, lease or order of any health care item or service reimbursable under Medicare, Medicaid or other federally-financed health care programs. This statute applies to arrangements between pharmaceutical manufacturers and prescribers, purchasers and formulary managers. Although there are a number of statutory exceptions and regulatory safe harbors protecting certain common activities, the exceptions and safe harbors are drawn narrowly, and practices 45 Table of Contents that involve remuneration intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor. Pharmaceutical companies have been prosecuted under these laws for a variety of alleged promotional and marketing activities, such as providing free product to customers with the expectation that the customers would bill federal programs for the product; reporting to pricing services inflated average wholesale prices that were then used by federal programs to set reimbursement rates; engaging in off-label promotion that caused claims to be submitted to Medicaid for non-covered off-label uses; and submitting inflated best price information to the Medicaid Drug Rebate Program. Federal enforcement agencies have also recently scrutinized product and patient assistance programs, including manufacturer reimbursement support services as well as relationships with specialty pharmacies. If our past or present operations are found to be in violation of any of such laws or any other governmental regulations that may apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines, exclusion from federal health care programs and/or the curtailment or restructuring of our operations. Any penalties, damages, fines, curtailment, or restructuring of our operations could adversely affect our ability to operate our business and our financial results. Any action against us for violation of these laws, even if we successfully defend against them, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. The Health Insurance Portability and Accountability Act of 1996 also created prohibitions against health care fraud and false statements relating to health care matters. The health care fraud statute prohibits knowingly and willfully executing a scheme to defraud any health care benefit program, including private payers. The false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for health care benefits, items or services. In addition, the federal “Sunshine” requirements pursuant to the PPACA imposed new requirements on (i) manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS information related to payments or other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other licensed health care practitioners, and teaching hospitals; and (ii) applicable manufacturers and GPOs to report annually to CMS ownership and investment interests held by physicians (as defined above) and their immediate family members and payments or other “transfers of value” to such physician owners and their immediate family members. Failure to submit the required information may result in civil monetary penalties of up an aggregate of $150,000 per year (and up to an aggregate of $1 million per year for “knowing failures”), for all payments, transfers of value or ownership or investment interests not reported in an annual submission, and may result in liability under other federal laws or regulations. The majority of states also have statutes or regulations similar to these federal laws, which apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payer. In addition, some states have laws that require pharmaceutical companies to adopt comprehensive compliance programs. For example, under California law, pharmaceutical companies must comply with both the April 2003 Office of Inspector General Compliance Program Guidance for Pharmaceutical Manufacturers and the Pharmaceutical Research and Manufacturers of America (“PhRMA”) Code on Interactions with Healthcare Professionals, as amended. Certain states also mandate the tracking and reporting of gifts, compensation, and other remuneration paid by us to physicians and other health care providers. We have adopted and implemented a compliance program designed to comply with applicable federal, state and local requirements wherever we operate, including but not limited to the laws of the states of California and Nevada. Although compliance programs can mitigate the risk of investigation and prosecution for violations of these laws, the risks cannot be entirely eliminated. Compliance with these laws and regulations is costly and materially affects our business. Among other effects, health care regulations substantially increase the time, difficulty and costs incurred in obtaining and maintaining approval to market newly developed and existing products. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. We expect compliance with these regulations to require significant technical expertise and capital investment to ensure the reasonable design and operation of an effective compliance program. Because of the breadth of these laws and the narrowness of the safe harbors, it is possible that some of our business activities could be subject to challenge under one or more of such laws. The PPACA also made several important changes to the federal Anti-Kickback Statute, false claims laws, and health care fraud statute by weakening the intent requirement under the anti-kickback and health care fraud statutes that may make it easier for the government, or whistleblowers to charge such fraud and abuse violations. A person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it. In addition, the Health Care Reform Law provides that the government may assert that a claim including items or services resulting from a violation of the federal anti-kickback statute constitutes a false or fraudulent claim for purposes of the false 46 Table of Contents claims statutes. In addition, the PPACA increases penalties for fraud and abuse violations. If our past, present or future operations are found to be in violation of any of the laws described above or other similar governmental regulations to which we are subject, we may incur significant civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion from government funded healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and negatively impact our financial results. We could be adversely affected by violations of the FCPA and other worldwide anti-bribery laws. The FCPA prohibits U.S. companies and their respective representatives from offering, promising, authorizing, or making improper payments to foreign officials for the purpose of obtaining or retaining business abroad. In many countries, the health care professionals we regularly interact with meet the definition of a foreign government official for purposes of the FCPA. We have policies and procedures in place to ensure that we comply with the FCPA and similar laws; however, there is no assurance that such policies and procedures will protect us against liability under the FCPA or related laws for actions taken by our employees and intermediaries with respect to our business. Failure to comply with the FCPA and related laws could disrupt our business and lead to criminal and civil penalties including fines, suspension of our ability to do business with the federal government and denial of government reimbursement of our products, which could result in a material adverse impact on our business, financial condition, results of operations and cash flows. We could also be adversely affected by any allegation that we violated such laws. Pricing for pharmaceutical products has come under increasing scrutiny by governments, legislative bodies and enforcement agencies. Changes in laws and regulations that control drug pricing for government programs allow for negotiated pricing or limit product coverage, and reduced reimbursements may adversely impact our operating results and our business. Many companies in our industry have received a governmental request for documents and information relating to drug pricing and patient assistance programs. We may become subject to similar requests, which would require us to incur significant expense and result in distraction for our management team. Additionally, to the extent there are findings, or even allegations, of improper conduct on the part of the Company or its employees, such findings or allegations could result in negative publicity or other negative actions that could harm our reputation; cause changes in our product pricing and distribution strategies; reduce demand for our approved products and/or reduce reimbursement of approved products, including by federal health care programs such as Medicare and Medicaid and state health care programs. Further, the Bipartisan Budget Act of 2018, among other things, amended the Affordable Care Act, effective January 1, 2019, to close the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole”. In December 2018, CMS published a final rule permitting further collections and payments to and from certain Affordable Care Act qualified health plans and health insurance issuers under the Affordable Care Act risk adjustment program in response to the outcome of federal district court litigation regarding the method CMS uses to determine this risk adjustment. On June 17, 2021 the U.S. Supreme Court dismissed a challenge on procedural grounds that argued the Affordable Care Act is unconstitutional in its entirety because the “individual mandate” was repealed by Congress. Thus, the Affordable Care Act will remain in effect in its current form. Further, prior to the U.S. Supreme Court ruling, on January 28, 2021, President Biden issued an executive order to initiate a special enrollment period for purposes of obtaining health insurance coverage through the Affordable Care Act marketplace. The executive order also instructs certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the Affordable Care Act. It is unclear how such challenges and the healthcare reform measures of the Biden administration will impact the Affordable Care Act. Further legislation or regulation could be passed that could harm our business, financial condition and results of operations. Other legislative changes have been proposed and adopted since the Affordable Care Act was enacted. For example, the Budget Control Act of 2011 and subsequent legislation, among other things, included reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect beginning on April 1, 2013 and will stay in effect through 2031 unless additional Congressional action is taken. Additionally, the American Rescue Plan Act of 2021 eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, beginning January 1, 2024. In January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. Further, the Inflation Reduction Act of 2022, or IRA, includes several provisions that may impact our business to varying degrees, including provisions that reduce the out-of-pocket cap for Medicare Part D beneficiaries to $2,000 starting in 2025; impose new manufacturer financial liability on certain drugs under Medicare Part D, allow the U.S. government to negotiate Medicare Part B and Part D price caps for certain high-cost drugs and biologics without 47 Table of Contents generic or biosimilar competition, require companies to pay rebates to Medicare for certain drug prices that increase faster than inflation, and delay the rebate rule that would limit the fees that pharmacy benefit managers can charge. Single-source biologics without competition on the market may not be selected for drug price negotiation under the IRA until at least 11 years since approval. The full effects of the IRA on our business and the healthcare industry in general is not yet known. Additionally, there has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices. Specifically, there have been several recent U.S. Congressional inquiries and federal and state legislative activity designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs. At the federal level, the FDA released a final rule and guidance in September 2020, implementing a portion of the importation executive order providing pathways for states to build and submit importation plans for drugs from Canada. Further, on November 20, 2020, HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law. The implementation of the rule has been delayed by the Biden administration from January 1, 2022 to January 1, 2023 in response to ongoing litigation. The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a new safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers, the implementation of which has been delayed until 2032 by the IRA. On November 20, 2020, CMS issued an interim final rule that would tie Medicare Part B payments for certain physician-administered drugs to the lowest price paid in other economically advanced countries; this rule was later rescinded as a result of litigation. In July 2021, the Biden administration released an executive order with multiple provisions aimed at prescription drugs. In response, in September 2021, HHS released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue to advance these principles. No legislation or administrative actions have been finalized to implement these principles. In addition, Congress is considering drug pricing as part of other reform initiatives. Individual states in the United States have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. We anticipate that these and other healthcare reform efforts will continue to result in additional downward pressure on coverage and the price that we receive for any approved product, and could seriously harm our business. Any reduction in reimbursement from Medicare and other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our products. Such reforms could have an adverse effect on anticipated revenue from product candidates that we may successfully develop and for which we may obtain regulatory approval and may affect our overall financial condition and ability to develop product candidates. Further, it is possible that additional governmental action will be taken in response to the COVID-19 pandemic. Risks Related to Our Common Stock Future issuances of our common stock or instruments convertible or exercisable into our common stock, may materially and adversely affect the price of our common stock and cause dilution to our existing stockholders. We may obtain additional funds through public or private debt or equity financings in the near future. If we issue additional shares of common stock or instruments convertible into common stock, it may materially and adversely affect the price of our common stock. In the past, we have issued shares of common stock pursuant to at-the-market-issuance sales agreements and we may do so in the future. Certain issuances by us of equity securities may be at or below the prevailing market price of our common stock and may have a dilutive impact on our existing stockholders. In addition, future exercises of some or all of our outstanding options, warrants, or other rights may likewise dilute the ownership interests of our stockholders, and any sales in the public market of any shares of our common stock issuable upon such conversion or exercise, or the perception that such sales may occur, could adversely affect the prevailing market price of our common stock. These issuances or other dilutive issuances would also cause our per share net income, if any, to decrease in future periods. The market price and trading volume of our common stock fluctuate significantly and could result in substantial losses for individual investors. The stock market from time to time experiences significant price and trading volume fluctuations that are unrelated to the operating performance of particular companies. These broad market fluctuations may cause the market price and trading volume of our common stock to decrease. In addition, the market price and trading volume of our common stock is often highly volatile. 48 Table of Contents Factors that may cause the market price and volume of our common stock to decrease include, among other things: • the impact of COVID-19 on the U.S. and global economies; • adverse results or delays in our clinical trials, including as a result of COVID-19; • fluctuations in our results of operations; • timing and announcements of our 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 products, or delays in the FDA or other foreign regulatory review processes or actions, including the CRL for our NDA for poziotinib; • changes in recommendations or guidelines of government agencies or other third parties regarding the use of our products; • adverse actions taken by regulatory agencies with respect to our drug products, clinical trials, manufacturing processes or sales and marketing activities; • concerns about our in-development products being reimbursed at requisite levels in the future; • any lawsuit involving us or our products; • developments with respect to our patents and proprietary rights; • public concern as to the safety of products developed by us or others; • regulatory developments in the U.S. and in foreign countries; • changes in stock market analyst recommendations regarding our common stock or lack of analyst coverage; • 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 significant stockholders or sales of substantial amounts of our common stock generally; and • loss of any of our key scientific or management personnel. Also, certain dilutive securities such as warrants can be used as hedging tools which may increase volatility in our stock and cause a price decline. While a decrease in market price could result in direct economic loss for an individual investor, low trading volume could limit an individual investor’s ability to sell our common stock, which could result in substantial economic loss as well. From January 1, 2022 through March 22, 2023, the closing price of our common stock ranged between $0.32 and $1.59, and the daily trading volume was as high as 47.7 million shares and as low as 0.5 million shares. Following periods of volatility in the market price of a company’s securities, a securities class action litigation may be instituted against that company. Regardless of their merit, these types of lawsuits generally result in substantial legal fees and management’s attention and resources being diverted from the operations of a business. We have not been in compliance with the requirements of the NASDAQ Stock Market for continued listing and if NASDAQ does not concur that we have adequately remedied our non-compliance, our common stock may be delisted from trading on NASDAQ, which could have a material adverse effect on us and our shareholders. We received notice pursuant to a letter dated November 1, 2022 from The NASDAQ Stock Market (“Nasdaq”) that, because the closing bid price for our common stock has fallen below $1.00 per share for 30 consecutive business days, we no longer comply with the minimum bid price requirement for continued listing on the Nasdaq Global Market. Nasdaq's notice has no immediate effect on the listing of our common stock on the Nasdaq Global Market. Pursuant to Nasdaq Marketplace Rule 5810(c)(3)(A), we have been provided an initial compliance period of 180 calendar days, or until May 1, 2023, to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of our common stock must meet or exceed $1.00 per share for a minimum of 10 consecutive business days prior to May 1, 2023. If we do not regain compliance by May 1, 2023, we may be eligible for an additional grace period if it applies to transfer the listing of its common stock to the Nasdaq Capital Market. To qualify, we would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the minimum bid price requirement, and provide written notice of its intention to cure the minimum bid price 49 Table of Contents deficiency during the second compliance period by effecting a reverse stock split if necessary. If the Nasdaq staff determines that we will not be able to cure the deficiency, or if we are otherwise not eligible for such additional compliance period, Nasdaq will provide notice that our common stock will be subject to delisting. We would have the right to appeal a determination to delist its common stock, and the common stock would remain listed on the Nasdaq Global Market until the completion of the appeal process. Provisions of our charter, and bylaws may make it more difficult for someone to acquire control of us or replace current management even if doing so would benefit our stockholders, which may lower the price an acquirer or investor would pay for our stock. Provisions of our certificate of incorporation and bylaws, both as amended, may make it more difficult for someone to acquire control of us or replace our current management. These provisions include: • 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 • the establishment of advance notice requirements for the nomination of candidates for election to our Board of Directors or for proposing matters that can be acted on by stockholders at stockholder meetings. These provisions may make it more difficult for stockholders to take certain corporate actions and could delay, discourage or prevent someone from acquiring our business or replacing our current management, even if doing so would benefit our stockholders. These provisions could limit the price that certain investors might be willing to pay for shares of our common stock. Risks Relating to Our Intellectual Property From time to time we may need to in-license patents and proprietary technologies from third parties, which may be difficult or expensive to obtain. We may need to obtain licenses to patents and other proprietary rights held by third parties to successfully develop, manufacture and market our drug products. As an example, it may be necessary to use a third party’s proprietary technology to reformulate one of our drug products in order to improve upon the capabilities of the drug product. If we are unable to timely obtain these licenses on reasonable terms, or at all, our ability to commercially exploit our drug products may be inhibited or prevented. If we are unable to adequately protect our technology or enforce our patent rights, our business could suffer. Our success with the drug products that we develop will depend, in part, on our ability and the ability of our licensors to obtain and maintain patent protection for these products. We currently have a number of U.S. and foreign patents issued and pending, however, we primarily rely on patent rights licensed from others. Our license agreements generally give us the right and/or obligation to maintain and enforce the subject patents. We may not receive patents for any of our pending patent applications or any patent applications we may file in the future. If our pending and future patent applications are not allowed or, if allowed and issued into patents, if such patents and the patents we have licensed are not upheld in a court of law, our ability to competitively exploit our drug products would be substantially harmed. Also, such patents may or may not provide competitive advantages for their respective products or they may be challenged or circumvented by our competitors, in which case our ability to commercially exploit these products may be diminished. The patent positions of pharmaceutical and biotechnology companies can be highly uncertain and involve complex legal and factual questions. No consistent policy regarding the breadth of claims allowed in pharmaceutical and biotechnology patents has emerged to date in the U.S. The laws of many countries may not protect intellectual property rights to the same extent as U.S. laws, and those countries may lack adequate rules and procedures for defending our intellectual property rights. Filing, prosecuting and defending patents on all our product or product candidates throughout the world would be prohibitively expensive. Competitors may use our technologies in jurisdictions not covered by any of our patent claims or other intellectual property rights. 50 Table of Contents Changes in either patent laws or in interpretations of patent laws in the U.S. and other countries may diminish the value of our intellectual property. We do not know whether any of our patent applications will result in the issuance of any patents, and we cannot predict the breadth of claims that may be allowed in our patent applications or in the patent applications we license from others. Intellectual property rights do not necessarily address all potential threats. The degree of future protection for our proprietary rights is uncertain because legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep our competitive advantage. For example: • in certain jurisdictions, 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 or product candidates; or • the patents of others may prevent us from marketing our product or product candidates for one or more indications that may be valuable to our business strategy. An issued patent does not guarantee us the right to practice the patented technology or commercialize the patented product. Third parties may have blocking patents that could be used to prevent us from commercializing our patented products and practicing our patented technology. Patents issued to us and our licensors and those that may be issued in the future to us and our licensors may be challenged, invalidated or circumvented, which could limit our ability to prevent competitors from marketing related product candidates or could limit the length of the term of patent protection of our product candidates. Our competitors may independently develop similar technologies. In addition, because of the extensive time required for development, testing and regulatory review of a potential product, it is possible that, before any of our product candidates can be commercialized, any related patent may expire or remain in force for only a short period following commercialization, thereby reducing any advantage of the patent. If we fail to comply with our obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose intellectual property rights that are important to our business. We are a party to exclusive license agreements with our partners and may need to obtain additional licenses from others to advance our research and development activities or allow the commercialization of our current product candidates and future product candidates we may identify and pursue. Our license agreements may impose, and we expect that future license agreements could impose various requirements on us, such as obligations related to development, diligence and commercialization, among others. In spite of our efforts, our licensors might conclude that we have materially breached our obligations under such license agreements and might therefore terminate the license agreements, thereby removing or limiting our ability to develop and commercialize products and technology covered by these license agreements. If these in-licenses are terminated, or if the underlying patents fail to provide the intended exclusivity, competitors or other third parties would have the freedom to seek regulatory approval of, and to market, products identical to ours and we may be required to cease our development and commercialization of our current product candidates or other product candidates that we may identify. Any of the foregoing could have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects. Moreover, disputes may arise regarding intellectual property subject to a licensing agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; 51 Table of Contents • the extent to which our product or product candidates, technology and manufacturing processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights under our collaborative development relationships; • our diligence obligations under the license agreement and what activities satisfy those diligence obligations; • the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and • the priority of invention of patented technology. In addition, the agreements under which we currently license intellectual property or technology from third parties are complex, and certain provisions in such agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our financial or other obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial condition, results of operations, and prospects. Moreover, if disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates, which could have a material adverse effect on our business, financial conditions, results of operations, and prospects. If we fail to adequately protect our trademarks, our developing brand recognition could suffer. We currently hold issued trademark registrations and have trademark applications pending, any of which may be the subject of a governmental or third-party objection, which could prevent the maintenance or issuance of the same. If we enforce our trademarks against third parties, such enforcement proceedings may be expensive. As our product and product candidates become more established and further develop, our reliance on our trademarks to differentiate us from our competitors increases and as a result, if we are unable to prevent third parties from adopting, registering or using trademarks and trade dress that infringe, dilute or otherwise violate our trademark rights, our business could be materially adversely affected. We may not be able to protect our intellectual property rights throughout the world. Filing, prosecuting and defending patents on our product and product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and may also export infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our products and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets, and other intellectual property protection, particularly those relating to biotechnology products, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license. Patent terms may be inadequate to protect our competitive position on our product and product candidates for an adequate amount of time. 52 Table of Contents Patents have a limited lifespan. In the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest U.S. non-provisional filing date. Various extensions may be available, but the life of a patent, and the protection it affords, is limited. Even if patents covering our product and product candidates are obtained, once the patent life has expired, we may be open to competition from competitive products, including generics or biosimilars. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours. Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products. Changes in either the patent laws or interpretation of the patent laws in the United States could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents. Assuming that other requirements for patentability are met, prior to March 2013, in the United States, the first to invent the claimed invention was entitled to the patent, while outside the United States, the first to file a patent application was entitled to the patent. After March 2013, under the Leahy-Smith America Invents Act (the “America Invents Act”) enacted in September 2011, the United States transitioned to a first inventor to file system in which, assuming that other requirements for patentability are met, the first inventor to file a patent application will be entitled to the patent on an invention regardless of whether a third party was the first to invent the claimed invention. A third party that files a patent application in the United States Patent and Trademark Office (“USPTO”) after March 2013, but before us could therefore be awarded a patent covering an invention of ours even if we had made the invention before it was made by such third party. This will require us to be cognizant of the time from invention to filing of a patent application. Since patent applications in the United States and most other countries are confidential for a period of time after filing or until issuance, we cannot be certain that we or our licensors were the first to either (i) file any patent application related to our product or product candidates or (ii) invent any of the inventions claimed in our or our licensor’s patents or patent applications. The America Invents Act also includes a number of significant changes that affect the way patent applications will be prosecuted and also may affect patent litigation. These include allowing third party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent by USPTO administered post-grant proceedings, including post-grant review, inter partes review, and derivation proceedings. Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in United States federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action. Accordingly, a third party may attempt to use the USPTO procedures to invalidate our patent claims that would not have been invalidated if first challenged by the third party as a defendant in a district court action. Therefore, the America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our owned or in- licensed patent applications and the enforcement or defense of our owned or in-licensed issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations, and prospects. In addition, the patent positions of companies in the development and commercialization of pharmaceuticals are particularly uncertain. Recent U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. This combination of events has created uncertainty with respect to the validity and enforceability of patents, once obtained. Depending on future actions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that could have a material adverse effect on our existing patent portfolio and our ability to protect and enforce our intellectual property in the future. Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements. Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and/or applications will be due to be paid to the USPTO and various governmental patent agencies outside of the United States in several stages over the lifetime of the patents and/or applications. We have systems in place to remind us when the fees are due, and we employ an outside firm to automatically pay these fees to both US and non-U.S agencies and we rely on our outside counsel to verify and confirm payment of these fees. The USPTO and various non-U.S. governmental patent agencies require compliance with a number of procedural, documentary, fee payment, and other similar provisions during the patent application process. We employ reputable law firms and other professionals to help us comply, and in many cases, an inadvertent lapse can be cured by 53 Table of Contents payment of a late fee or by other means in accordance with the applicable rules. However, there are situations in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, our competitors might be able to enter the market and this circumstance would have a material adverse effect on our business. Intellectual property rights are complex and uncertain and therefore may subject us to infringement claims. The patent positions related to our drug products are inherently uncertain and involve complex legal and factual issues. We believe that there is significant litigation in the pharmaceutical and biotechnology industry regarding patent and other intellectual property rights. A patent does not provide the patent holder with freedom to operate in a way that infringes the patent rights of others. We may be accused of patent infringement at any time. The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform. If we are sued for patent infringement, we would need to demonstrate that our products or methods do not infringe the patent claims of the relevant patent and/or that the patent claims are invalid or unenforceable, and we may not be able to do this. Proving invalidity, in particular, is difficult since it requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents in the U.S. Although we are not aware of any infringement by any of our drug products of any valid patent rights of any third party, there may be third party patents or other intellectual property rights, including trademarks and copyrights, relevant to our drug products of which we are not aware. Third parties may assert patent or other intellectual property infringement claims against us, or our licensors and collaborators, with products. Any claims that might be brought against us relating to infringement of patents may cause us to incur significant expenses and, if successfully asserted against us, may cause us to pay substantial damages and result in the loss of our use of the intellectual property that is critical to our business strategy. In the event that we or our partners are found to infringe any valid claim of a patent held by a third party, we may, among other things, be required to: • pay damages, including up to treble damages and the other party’s attorneys’ fees, which may be substantial; • cease the development, manufacture, use and sale of our products that infringe the patent rights of others through a court-imposed sanction such as an injunction; • expend significant resources to redesign our products so they do not infringe others’ patent rights, which may not be possible; • discontinue manufacturing or other processes incorporating infringing technology; or • obtain licenses to the infringed intellectual property, which may not be available to us on acceptable terms, or at all. We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets of their former employers. As is common in the biotechnology and pharmaceutical industry, we employ individuals who were previously employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although we try to ensure that our employees, consultants and independent contractors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of any of our employee’s former employer or other third parties. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel, which could adversely impact our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. In addition, while we require our employees and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property that we regard as our own. The assignment of intellectual property rights may not be self-executing or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property. We may be involved in additional lawsuits to defend or enforce our patents, which could be expensive, time-consuming and unsuccessful. 54 Table of Contents Competitors may infringe upon our patents. To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time-consuming. In addition, in an infringement proceeding, a court may decide that one or more of our patents is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question. An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated, held unenforceable, or interpreted narrowly and could put our patent applications at risk of not issuing. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business. Interference or derivation proceedings provoked by third parties or brought by the USPTO may be necessary to determine the priority of inventions with respect to our patents or patent applications. An unfavorable outcome could require us to cease using the related technology or to attempt to license rights to it from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms. Litigation or interference proceedings may fail, even if successful, may result in substantial costs and distract our management and other employees. We may not be able to prevent misappropriation of our trade secrets or confidential information, particularly in countries where the laws may not protect those rights as fully as in the U.S. or in Europe. Furthermore, because of the substantial amount of discovery that could be required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on our stock price. We may be subject to claims challenging the inventorship of our patents and other intellectual property. We or our licensors may be subject to claims that former employees, collaborators or other third parties have an interest in our owned or in-licensed patents, trade secrets, or other intellectual property as an inventor or co-inventor. For example, we or our licensors may have inventorship disputes arise from conflicting obligations of employees, consultants or others who are involved in developing our product or product candidates. Litigation may be necessary to defend against these and other claims challenging inventorship or our or our licensors’ ownership of our owned or in-licensed patents, trade secrets or other intellectual property. If we or our licensors fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, intellectual property that is important to our product and product candidates. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects. Data breaches and cyber-attacks could compromise our intellectual property or other sensitive information and cause significant damage to our business, reputational harm and financial loss. In the ordinary course of our business, we collect, maintain and transmit sensitive data on our networks and systems, including our intellectual property and proprietary or confidential business information (such as research data and personal information) and confidential information with respect to our customers, clinical trial patients and our business partners. We have also outsourced significant elements of our information technology infrastructure and, as a result, third parties may or could have access to our confidential information and personal data. The secure maintenance of this information is critical to our business and reputation. We believe that companies have been increasingly subject to a wide variety of security incidents, cyber-attacks and other attempts to gain unauthorized access and unintentional breaches. These threats can come from a variety of sources, ranging in sophistication from an individual hacker to a state-sponsored attack and motive (including corporate espionage). Cyber threats may be generic, or they may be custom-crafted against our information systems. Our network and storage applications and those of our vendors may be subject to unauthorized access by hackers or information security breaches due to operator error, malfeasance or other system disruptions. It is often difficult to anticipate or immediately detect such incidents and the damage caused by such incidents, particularly for cyber incidents such as advanced persistent threats. These data breaches and any unauthorized access or disclosure of our information or intellectual property could compromise our intellectual property and expose sensitive business information. A data security breach could also lead to public exposure of personal information of our clinical trial patients, customers and others. Cyber- attacks and information security breaches could cause us to incur significant remediation costs, result in product development delays, disrupt key business operations and divert attention of management and key information technology resources. Our network security and data recovery measures and those of our vendors may not be able to detect or prevent every attempted breach and may not permit us to respond effectively to every breach. These incidents could also subject us to liability, expose us to significant expense and cause significant harm to our reputation and business. Reputational harm resulting from a significant cyber incident may cause unquantifiable damage to our established goodwill. Moreover, as cyber incidents continue to evolve, we will likely be required to expend additional 55 Table of Contents resources to enhance our security posture and cybersecurity defenses or to investigate and remediate any vulnerability to or consequences of cyber incidents. Our insurance coverage may not be sufficient to prevent or recover from cyberattacks, including coverage of applicable resulting losses arising from the incident. Further, each foreign jurisdiction and U.S. state in which we operate may have laws governing how we must respond to a cyber incident that results in the unauthorized access, disclosure, or loss of personal information. Additionally, new laws and regulations governing data privacy and unauthorized disclosure of confidential information, including recent California legislation providing for a private right of action, pose increasingly complex compliance challenges and could potentially elevate our costs over time. As legislation continues to develop and cyber incidents continue to evolve, we will likely be required to expend significant resources to continue to modify or enhance our protective measures to comply with such legislation and to detect, investigate and remediate vulnerabilities to cyber incidents. Any failure by us to comply with such laws and regulations could result in reputational harm, loss of goodwill, penalties, liabilities and/or mandated changes in our business practices. General Risk Factors Our failure to establish and maintain effective internal control over financial reporting could result in material misstatements in our financial statements, our failure to meet our reporting obligations and cause investors to lose confidence in our reported financial information, which in turn could cause the trading price of our common stock to decline. The results of our periodic management evaluations regarding the effectiveness of our internal control over financial reporting are required by the Sarbanes-Oxley Act of 2002. Any failure to maintain enhanced monitoring controls and improved detection and communication of financial misstatements across all levels of the organization could result in (i) material weaknesses, (ii) material misstatements in our financial statements, requiring restatements of our previously-filed financial statements, and (iii) cause us to fail to meet our timely reporting and debt compliance obligations. These outcomes could cause us to lose public confidence, and could cause the trading price of our common stock to decline. For further information regarding our controls and procedures, see Item 9A. Controls and Procedures. Changes in our effective income tax rate could adversely affect our profitability. Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited. We are subject to federal and state income taxes in the U.S. and our tax liabilities are dependent upon the distribution of income among these different jurisdictions. Various factors may have significant favorable or unfavorable effects on our effective income tax rate, and could have an impact on our profitability. These factors include, but are not limited to: • interpretations of existing tax laws; • the accounting for stock options and other share-based compensation; • changes in tax laws and rates; • future levels of research and development spending; • changes in accounting standards; • changes in the mix of earnings in the various tax jurisdictions in which we operate; • the outcome of examinations by the Internal Revenue Service and tax regulators in other jurisdictions; • the accuracy of our estimates for unrecognized tax benefits; • realization of deferred tax assets; and • changes in overall levels of pre-tax earnings. 56 Table of Contents Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change” (generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period), the corporation’s ability to use its pre-ownership change net operating loss carryforwards and other pre-ownership change tax attributes to offset its post-change income may be limited. As of December 31, 2022 we have U.S. net operating loss carryforwards of approximately $789.3 million. As a result of our public offerings of common stock, we may have triggered an “ownership change.” We may also experience ownership changes in the future as a result of subsequent shifts in our stock ownership. Accordingly, if we earn net taxable income, our ability to use our pre-ownership change net operating loss carryforwards to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us. If we become profitable in the future, our ability to use net operating loss carryforwards and other tax attributes to offset future taxable income or reduce taxes may be subject to limitations, and we cannot assure what, if any, the benefit related to our net operating loss carryforwards will be in the future. Natural disasters, war and other events could adversely affect our future revenues and operating income. Natural disasters, including the impacts of climate change, hurricanes, tornadoes, windstorms, fires, earthquakes and floods and other extreme weather events, global health pandemics, war, terrorism, labor disruptions and international conflicts, and actions taken by the United States and other governments or by our customers or suppliers in response to such events, could cause significant economic disruption and political and social instability in the United States and areas outside of the United States in which we operate. These events could result in decreased demand for our products, adversely affect our manufacturing and distribution capabilities, or increase the costs for or cause interruptions in the supply of materials from our suppliers. Our business and operations are subject to risks related to climate change. The long-term effects of global climate change present risks to our business. Extreme weather or other conditions caused by climate change could adversely impact our supply chain and the availability and cost of raw materials and components required for the operation of our business. Such conditions could also result in physical damage to products, plants and distribution centers, as well as the infrastructure and facilities and other customers. In addition, regulations intended to limit greenhouse gas emissions, such as taxes on fuel and energy, to mitigate the impacts of climate change may increase, which could increase our operating costs and the costs charged by suppliers. These events could adversely affect our operations and our financial performance. We are subject to the risks of securities and related litigation, which may expose us to substantial liabilities and could seriously harm our business. We may be subject to the risk of securities litigation and derivative actions from time to time as a result of being publicly traded, including the remaining unresolved actions set forth in Item 3. Legal Proceedings. There can be no assurance that any settlement or liabilities in such actions or any future lawsuits or claims against us would be covered or partially covered by our insurance policies, which could have a material adverse effect on our earnings in one or more periods. While we and our Board of Directors deny the allegations of wrongdoing against us in the unresolved actions initiated against us, there can be no assurance as to the ultimate outcome or timing of their resolutions. In addition to the potential costs and liabilities, securities litigation could divert management’s attention and resources, which could seriously harm our business. Global, market and economic conditions may negatively impact our business, financial condition and share price. Concerns over inflation, geopolitical issues, the U.S. financial markets, foreign exchange rates, capital and exchange controls, unstable global credit markets and financial conditions and the COVID-19 pandemic, have led to periods of significant economic instability, declines in consumer confidence and discretionary spending, diminished expectations for the global economy and expectations of slower global economic growth going forward, and increased unemployment rates. Our general business strategy may be adversely affected by any such economic downturns, volatile business environments and continued unstable or unpredictable economic and market conditions. If these conditions continue to deteriorate or do not improve, it may make any necessary debt or equity financing more difficult to complete, more costly and more dilutive. In addition, there is a risk that one or more of our current or future service providers, manufacturers, suppliers and other partners could be negatively affected by difficult economic times, which could adversely affect our ability to attain our operating goals on schedule and on budget or meet our business and financial objectives. In addition, we face several risks associated with international business and are subject to global events beyond our control, including war, public health crises, such as pandemics and epidemics, trade disputes, economic sanctions, trade wars and their collateral impacts and other international events. Any of these changes could have a material adverse effect on our reputation, business, financial condition or results of operations. There may be changes to our business if there is instability, 57 Table of Contents disruption or destruction in a significant geographic region, regardless of cause, including war, terrorism, riot, civil insurrection or social unrest; and natural or man-made disasters, including famine, flood, fire, earthquake, storm or disease. In February 2022, armed conflict escalated between Russia and Ukraine. The sanctions announced by the U.S. and other countries, following Russia’s invasion of Ukraine against Russia to date include restrictions on selling or importing goods, services or technology in or from affected regions and travel bans and asset freezes impacting connected individuals and political, military, business and financial organizations in Russia. The U.S. and other countries could impose wider sanctions and take other actions should the conflict further escalate. It is not possible to predict the broader consequences of this conflict, which could include further sanctions, embargoes, regional instability, geopolitical shifts and adverse effects on macroeconomic conditions, currency exchange rates and financial markets, all of which could impact our business, financial condition and results of operations. Item 1B. Unresolved Staff Comments None. Item 2. Properties We lease 10,000 square feet for our principal executive office in Boston, Massachusetts under an operating lease expiring December 31, 2024, and 4,000 square feet for our administrative and research and development facility in Irvine, California under a non-cancelable operating lease expiring July 31, 2025. We believe that these leased facilities are adequate to meet our current and planned business needs. Item 3. Legal Proceedings From time-to-time, we are involved with various legal matters arising from the ordinary course of operating our publicly-traded pharmaceutical business. These legal matters may include product liability claims, intellectual property claims, employment practices claims, shareholder claims, among other general claims. We record liability provisions to our financial statements for such matters when it is both: (1) probable that a payment will be made to the claimant and (2) we can reasonably estimate the payment amount, given all available information. Our legal accrual assessments are performed at least quarterly, and are adjusted to reflect the impact of any settlement negotiations, judicial and administrative rulings, advice of legal counsel, and other information and events pertaining to each particular case. Although litigation is inherently unpredictable, we do not believe that individually or in the aggregate, these claims will have a material adverse effect on our consolidated results of operations, cash flows, or financial condition. Certain of our legal proceedings are discussed in Note 8(g) - Litigation to our accompanying Consolidated Financial Statements. Item 4. Mine Safety Disclosures Not applicable. PART II. Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the NASDAQ Global Select Market under the symbol “SPPI.” On March 22, 2023, the closing price of our common stock on the NASDAQ Global Select Market was $0.73 per share, and there were 157 holders of record of our common stock. Dividend Policy We have not paid dividends on our common stock during the most two recent fiscal years. We currently intend to retain all earnings, if any, for use in the expansion of our business and do not anticipate paying any dividends in the foreseeable 58 Table of Contents future. However, the payment of dividends, if any, will be at the discretion of the Board of Directors and subject to compliance at such time with any applicable restrictions contained in our various agreements and applicable law. Securities Authorized for Issuance Under Equity Compensation Plans The information required by Item 201(d) of Regulation S-K is incorporated by reference to our definitive proxy statement related to our 2023 Annual Meeting of Stockholders (the “Proxy Statement”), to be filed pursuant to Regulation 14A, on or before April 30, 2023. Unregistered Sales of Equity Securities All equity securities that we sold during the period covered by this Annual Report that were not registered under the Securities Act have been previously reported in our quarterly reports on Form 10-Q or on our current reports on Form 8-K. Item 6. [Reserved] Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis should be read in conjunction with our consolidated financial statements and the related notes included in this Annual Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of various factors including the risks we discuss in Item 1A. Risk Factors and elsewhere in this Annual Report. Company Overview Spectrum Pharmaceuticals, Inc. (“Spectrum,” the “Company,” “we,” “our,” or “us”) is a commercial-stage biopharmaceutical company, with a strategy of acquiring, developing, and commercializing novel and targeted oncology therapies. We have an in-house clinical development organization with regulatory and data management capabilities, in addition to commercial infrastructure and a field based sales force for our marketed product, ROLVEDON™ (formerly known as eflapegrastim). We have one commercial asset and one drug candidate in late-stage development: • ROLVEDON™ is a novel long-acting granulocyte colony-stimulating factor (“G-CSF”) for the treatment of chemotherapy-induced neutropenia. On April 11, 2022, we announced that we had received notice that the resubmission of our Biologics License Application (“BLA”) for ROLVEDON had been accepted and received a Prescription Drug User Fee Act (“PDUFA”) date of September 9, 2022. On September 9, 2022, we received the U.S. Food and Drug Administration’s (“FDA”) marketing approval for ROLVEDON and began commercialization activities in the fourth quarter of 2022; and • Poziotinib is a novel irreversible TKI under investigation for NSCLC tumors with various mutations. On December 6, 2021, we announced we submitted our NDA for poziotinib to the FDA for use in patients with previously treated locally advanced or metastatic NSCLC with HER2 exon 20 insertion mutations. The NDA submission is based on the positive results of Cohort 2 from the ZENITH20 clinical trial, which assessed the safety and efficacy of poziotinib. The product candidate received fast track designation from the FDA and there is currently no treatment specifically approved by the FDA for this indication. On February 11, 2022, we announced that we received notice from the FDA that the NDA had been accepted for filing and received a PDUFA action date of November 24, 2022. On September 22, 2022, the Company met with the FDA’s Oncologic Drugs Advisory Committee (“ODAC”). The ODAC voted 9 (no) - 4 (yes) that the current benefits of poziotinib did not outweigh its risks for the treatment of patients with NSCLC with HER2 exon 20 insertion mutations. On November 25, 2022, we announced that we had received a Complete Response Letter (“CRL”) from the FDA regarding our NDA. The CRL stated that the FDA determined that it could not approve the NDA in its present form and provided recommendations needed for resubmission, including generating additional data from a randomized controlled study prior to approval. We are continuing to evaluate these recommendations but we have de-prioritized further poziotinib development activities. Our business strategy is the development of our late-stage assets through commercialization and the sourcing of additional assets that are synergistic with our existing portfolio (through purchase acquisitions, in-licensing transactions, or co-development and marketing arrangements). Recent Highlights of Our Business, Product Development Initiatives, and Regulatory Approvals Our product and commercial product pipeline is summarized below: 59 Table of Contents ROLVEDON, a novel long-acting G-CSF: We submitted our BLA for ROLVEDON to the FDA on October 24, 2019 that is supported by data from two similarly designed Phase 3 clinical trials, ADVANCE and RECOVER, which evaluated the safety and efficacy of ROLVEDON in 643 early-stage breast cancer patients for the treatment of neutropenia due to myelosuppressive chemotherapy. Both studies met the pre-specified endpoint of non-inferiority in duration of severe neutropenia and met all of the secondary endpoints. In addition, the safety profile was similar to pegfilgrastim. On August 6, 2021, we announced the receipt of a Complete Response Letter (“CRL”) based on manufacturing deficiencies identified at both the drug substance and drug product manufacturers. The Company believes these manufacturing deficiencies had been remediated and on March 11, 2022, we resubmitted the BLA for ROLVEDON. On April 11, 2022, the Company announced that it had received notice that the BLA had been accepted and received a PDUFA date of September 9, 2022. On September 9, 2022, the Company received FDA marketing approval for ROLVEDON injection to decrease the incidence of infection, as manifested by febrile neutropenia, in adult patients with non-myeloid malignancies receiving myelosuppressive anti-cancer drugs associated with clinically significant incidence of febrile neutropenia. We began commercialization activities of ROLVEDON in the fourth quarter of 2022 and ROLVEDON is currently being marketed for sale in the United States. A company sponsored clinical trial that has been initiated to evaluate the administration of eflapegrastim on the same day as chemotherapy is currently ongoing. This Phase 1 clinical trial is a randomized, open label, actively controlled study to evaluate the same-day dosing of eflapegrastim on duration of neutropenia when administered at varying intervals following docetaxel and cyclophosphamide (TC) chemotherapy in patients with early-stage breast cancer. The study was completed with the enrollment of 16 patients dosed with eflapegrastim 30 minutes after chemotherapy on the same day in Cycle 1. The study added an Expansion Phase with a plan to dose approximately 45 patients with eflapegrastim 30 minutes after the chemotherapy on the same day in all 4 cycles. The overall safety profile to date for the 30-minute arm was similar to what has been seen previously in large, randomized studies with G-CSF given 24 hours after chemotherapy. The safety will be monitored continuously throughout the Expansion Phase of the study. An evaluation of safety and efficacy will be conducted once the data from 6 patients in the Expansion Phase is complete to determine the trend. As part of the post-market requirement, Spectrum is expected to conduct a pediatric study in Rolvedon that includes the development of an appropriate formulation to dose certain pediatric patients of 1 month to 17 years of age based on weight-based dosing. The study as well as the development of a pediatric formulation is in progress. Poziotinib, a Pan ErbB inhibitor targeting HER2 exon20 mutations: Poziotinib is a novel, pan-HER inhibitor that irreversibly blocks signaling through the Epidermal Growth Factor Receptor (“EGFR”) family of tyrosine-kinase receptors, including HER1 (erbB1; EGFR), HER2 (erbB2), HER4 (erbB4), and HER receptor mutations. This, in turn, leads to the inhibition of the proliferation of tumor cells that over-express these receptors. Mutations of over-expression/amplification of EGFR family receptors have been associated with a number of different cancers, including NSCLC, breast cancer, and gastric cancer. In February 2015, we entered into a co- development and commercialization agreement with Hanmi for poziotinib worldwide rights, except in Korea and China. Our clinical development program for poziotinib is focused on previously treated NSCLC, first-line treatment of NSCLC and treatment of other solid tumors with HER2 mutations. NSCLC tumors with HER2 exon 20 insertion mutations are rare and have generally not been responsive to other TKIs. Patients with these mutations have a poor prognosis, and available treatment options are limited. Poziotinib, due to its unique chemical structure and characteristics, is believed to inhibit cell growth of tumors with HER2 exon-20 insertion mutations. In October 2017, we announced the start of a pivotal Phase 2 global clinical trial with active sites in the U.S., Canada and Europe (“ZENITH20”). The ZENITH20 trial consisted of seven cohorts of NSCLC patients. Cohorts 1, 2, 3 and 4 had completed enrollment while Cohorts 5, 6, and 7 ceased enrolling patients upon the receipt of the CRL (discussed below). Cohorts 1 (EGFR) and 2 (HER2) included previously treated NSCLC patients with exon 20 mutations. Cohort 3 (EGFR) and 4 (HER2) included first-line NSCLC patients with exon 20 mutations. Cohorts 1- 4 were each independently powered for a pre-specified statistical hypothesis and the primary endpoint was objective response rate (“ORR”). Cohort 5 included previously treated or treatment- naïve NSCLC patients with EGFR or HER2 exon 20 insertion mutations and evaluated different dosing regimens. Cohort 6 included NSCLC patients with classical EGFR mutations who progressed while on treatment with first-line osimertinib and developed an additional EGFR mutation. Cohort 7 included NSCLC patients with a variety of less common mutations in EGFR or HER2 exons 18-21 or the extracellular or transmembrane domains. On December 26, 2019, we announced that the pre-specified primary endpoint was not met in Cohort 1 of the ZENITH20 trial evaluating poziotinib in previously treated NSCLC patients with EGFR exon 20 insertion mutations. Cohort 1 enrolled a total of 115 patients who received 16 mg/day of poziotinib. The intent-to-treat analysis showed that 17 patients had a response (by RECIST) and 62 patients had stable disease for a 68.7% disease control rate (“DCR”). The confirmed ORR was 14.8% 60 Table of Contents (95% CI 8.9%-22.6%). The median duration of response was 7.4 months and the progression free survival was 4.2 months. The safety profile was in-line with other second-generation EGFR TKIs. On July 27, 2020, we announced that we met the pre-specified primary endpoint for Cohort 2 in the ZENITH20 trial evaluating previously treated NSCLC patients with HER2 exon 20 insertion mutations. Cohort 2 enrolled a total of 90 patients who received an oral, once daily dose of 16 mg of poziotinib. All the patients had failed at least one line of prior systemic therapy with 60 patients (67%) having failed two or more prior therapies, including chemotherapy and immunotherapy. All responses were read independently and confirmed by a central imaging laboratory using RECIST criteria. The intent-to-treat analysis demonstrated a confirmed ORR of 27.8% (95% CI of 18.9%-38.2%). Based on the pre-specified statistical hypothesis for the primary endpoint, the observed lower bound of 18.9% exceeded the pre-specified lower bound of 17% in this heavily pre-treated population. The safety profile was in-line with the type of adverse events seen with other second-generation EGFR TKIs. These results were presented at the European Society for Medical Oncology (“ESMO”) Virtual Congress 2020 Science Weekend held in September 2020. In December 2020, we reported that its pre-specified primary endpoint in Cohort 3 evaluating poziotinib in first-line NSCLC patients with EGFR exon 20 insertion mutations was not met. Cohort 3 of the ZENITH20 clinical trial enrolled a total of 79 patients who received an oral once daily dose of 16 mg of poziotinib. The median time of follow up of all patients was 9.2 months. The intent-to-treat analysis showed that 22 patients had a partial response (by RECIST) and 68 patients had stable disease for an 86.1% DCR. 91% of patients experienced tumor reduction with a median reduction of 25.5%. The confirmed ORR was 27.8% (95% CI 18.4-39.1%). Based on the pre-specified statistical hypothesis for the primary endpoint, the observed lower bound of 18.4% did not meet the pre-specified lower bound of >20%. The median duration of response was 6.5 months and the median progression free survival was 7.2 months. The safety profile was similar with the type of adverse events observed with other second-generation EGFR TKIs. Grade 3 treatment related rash was 33% and diarrhea was 23%. 94% of patients had drug interruptions with 6 patients (8%) permanently discontinuing due to adverse events. In March 2021, we announced that the FDA granted fast track designation for poziotinib based on data from Cohort 2 of ZENITH20, which evaluated previously treated patients with NSCLC with HER2 exon 20 insertion mutations. On December 6, 2021, the Company announced the submission of its NDA for poziotinib to the FDA for use in patients with previously treated locally advanced or metastatic NSCLC with HER2 exon 20 insertion mutations. The NDA submission is based on the positive results of Cohort 2 from the ZENITH20 clinical trial, which assessed the safety and efficacy of poziotinib. On February 11, 2022, the Company announced that the file had been accepted and an action date of November 24, 2022 had been set. In March 2022, the Company presented the results of Cohort 4 at the European Society for Medical Oncology Targeted Anticancer Therapies (“ESMO TAT”) meeting. Cohort 4 of the ZENITH20 clinical trial enrolled a total of 70 patients, 48 of whom received an oral once daily dose of 16 mg of poziotinib and 22 of who received an oral twice daily dose of 8 mg of poziotinib. The intent-to-treat analysis demonstrated a confirmed ORR of 41% (95% CI of 30%-54%). Based on the pre-specified statistical hypothesis for the primary endpoint, the observed lower bound of 30% exceeded the pre-specified lower bound of 20%. The median duration of response was 5.7 months and median progression free survival was 5.6 months. The most common treatment related Grade ≥ 3 adverse events were rash (30%), stomatitis (19%), diarrhea (14%), and paronychia (7%). In addition, the incidence of Grade ≥ 3 pneumonitis was low at 3%. The safety profile was consistent with the TKI class. On September 22, 2022, the Company met with ODAC to review poziotinib for the treatment of patients with previously treated locally advanced or metastatic non-small cell lung cancer harboring HER2 exon 20 insertion mutations. The committee voted 9 (no) - 4 (yes) that the current benefits of poziotinib did not outweigh its risks. ODAC is an independent panel of experts that reviews and evaluates data concerning the efficacy and safety of marketed and investigational products for use in the treatment of cancer. ODAC makes appropriate recommendations to the FDA, but these recommendations are not binding and the final decision regarding product approval will be made solely by the FDA. On November 25, 2022, the Company announced that it had received a CRL from the FDA regarding our NDA, indicating that the NDA could not be approved in its present form and that based on the CRL, the Company would have to generate additional data including a randomized controlled study prior to approval. The Company also announced that we are de-prioritizing poziotinib program activities. Impact of COVID-19 Pandemic The COVID-19 pandemic has adversely impacted economic activity and conditions worldwide, including workforces, liquidity, capital markets, consumer behavior, supply chains, and macroeconomic conditions. Despite progress in vaccination efforts, global economic activity remains uncertain and cannot be predicted with confidence. The extent to which the COVID-19 pandemic may continue to impact our results of operations depends on numerous evolving factors, which are highly uncertain and difficult to predict, including new information that may emerge concerning the continued severity of COVID-19 and variants of COVID-19 and the actions to contain COVID-19 or treat its impact, among 61 Table of Contents others. For more information related to the impact of COVID-19 on our business, refer to the risk factors within Item 1A. Risk Factors – Risks Related to Our Business -- COVID-19 and other pandemics, epidemics, or outbreaks of a contagious illness could materially and adversely impact or disrupt our business and our financial condition, results of operations, cash flows and performance. Components of Operating Results The below summarizes the nature of our revenue and operating expense line items within our Consolidated Statements of Operations: Net Sales ROLVEDON became available for commercial sale to patients with prescriptions in the fourth quarter of 2022. We sell ROLVEDON to large pharmaceutical wholesalers and distributors, which we recognize revenue upon title transfer (which is typically at time of delivery), provided our other revenue recognition criteria have been met. The transaction price that we recognize for ROLVEDON revenue includes an estimate of variable consideration. Shipping and handling costs to our customers are recorded as cost of sales. The components of variable consideration include: Product Returns Allowances: Our customers are contractually permitted to return purchased products in certain circumstances. We estimate expected product returns for our allowance based on our expected return rates of similar products as well as assumptions regarding projected demand. Returned product is typically destroyed, since substantially all returns are due to expiry and cannot be resold. Government Chargebacks: Our product is subject to pricing limits under certain federal government programs (e.g., Medicare, Medicaid, and 340B Drug Pricing Program). Qualifying entities (i.e., end-users) purchase products from our customers at their qualifying discounted price. The chargeback amount we incur represents the difference between our contractual sales price to our customer, and the end-user’s applicable discounted purchase price under the government program. There may be significant lag time between our reported net product sales and our receipt of the corresponding government chargeback claims from our customers. Prompt Pay Discounts: Discounts for prompt payment are estimated at the time of sale, based on our eligible customers’ prompt payment history and the contractual discount percentage. Commercial Rebates: Commercial rebates are based on (i) our estimates of end-user purchases through a group purchasing organization (“GPO”), (ii) the corresponding contractual rebate percentage tier we expect each GPO to achieve, and (iii) our estimates of the impact of any prospective rebate program changes made by us. Medicaid Rebates: Our product is subject to state government-managed Medicaid programs, whereby rebates are issued to participating state governments. These rebates arise when a patient treated with our product is covered under Medicaid, resulting in a discounted price for our product under the applicable Medicaid program. Our Medicaid rebate accrual calculations require us to project the magnitude of our sales, by state, that will be subject to these rebates. There is a significant time lag in us receiving rebate notices from each state (generally several months or longer after our sale is recognized). Our estimates are based on our historical claim levels of similar products by state, as supplemented by management’s judgment. Distribution, Data, and GPO Administrative Fees: Distribution, data, and GPO administrative fees are paid to authorized wholesalers/distributors of our products for various commercial services including contract administration, inventory management, delivery of end-user sales data, and product returns processing. These fees are based on a contractually-determined percentage of our applicable sales. Our revenue recognition criteria are described in greater detail below and in Note 2(i) to the accompanying Consolidated Financial Statements. Cost of Sales Cost of sales includes the cost of the inventory sold, which includes direct manufacturing, production and packaging materials, shipping expenses, and royalty fees. Operating Expenses 62 Table of Contents Selling, General and Administrative Selling, general and administrative expenses primarily consist of compensation (including stock-based compensation) and benefits for our sales force and personnel that support our sales and marketing operations, and our general operations such as information technology, executive management, financial accounting, and human resources. It also includes costs attributable to marketing our products to our customers and prospective customers, patent and legal fees, financial statement audit fees, insurance coverage fees, personnel recruiting fees, and other professional services. Research and Development Our research and development activities primarily relate to the clinical development of our drug pipeline and costs associated with at-risk manufacture of drug products prior to FDA approval. These clinical development expenses specifically consist of (i) compensation (including stock-based compensation) and benefits for research and development and clinical and regulatory personnel, (ii) materials and supplies for each project, (iii) consultants, and (iv) associated regulatory and clinical site expenses. Our research and development manufacturing expenses are recognized in the period which the activity occurs and includes (i) our technology transfer costs for production, (ii) FDA qualification costs of our contract manufacturers’ sites, and (iii) material and service costs associated with our inventory build prior to FDA approval. Results of Operations Comparison of the Years Ended December 31, 2022 and 2021 Year Ended December 31, 2022 2021 $ Change ($ in thousands) Net sales $ 10,114 $ — $ 10,114 Expenses: Cost of sales 1,792 — 1,792 Selling, general and administrative 38,816 60,406 (21,590) Research and development 42,203 87,297 (45,094) Total expenses 82,811 147,703 (64,892) Loss from continuing operations before other income (expense) and income taxes (72,697) (147,703) 75,006 Other income (expense): — Interest income 968 215 753 Interest expense (998) (52) (946) Other expense, net (5,331) (10,892) 5,561 Total other expense (5,361) (10,729) 5,368 Loss from continuing operations before income taxes (78,058) (158,432) 80,374 Provision for income taxes from continuing operations (46) (4) (42) Loss from continuing operations (78,104) (158,436) 80,332 Income (loss) from discontinued operations, net of income taxes 2,703 (192) 2,895 Net loss $ (75,401) $ (158,628) $ 83,227 Net Sales. During the fourth quarter of 2022, net sales were $10.1 million as we began to sell our sole commercial product, ROLVEDON, which was approved by the FDA on September 9, 2022. We had no sales during the year ended December 31, 2021. Cost of Sales. During the year ended December 31, 2022, the cost of sales was $1.8 million, which consisted primarily of packaging costs, freight and royalties associated with the net sales of ROLVEDON owed to our licensing partner and $1.1 million of start-up expenses associated with stability and bio-burden testing. The amount did not include any direct costs associated with the manufacture of ROLVEDON. Prior to FDA approval in September 2022, we expensed approximately $5.7 million in costs associated with the manufacturing of ROLVEDON as a component of research and development expense. If we were to have included those costs previously expensed as a component of cost of sales, our cost of sales for the year ended 63 Table of Contents December 31, 2022 would have been $3.0 million. We expect to sell the remaining $4.5 million of previously expensed inventory over the next nine months. We expect the cost of sales to remain low through the first nine months of 2023 as we sell through certain inventory that was expensed prior to FDA approval of ROLVEDON in September 2022, and we expect our cost of sales to increase thereafter. Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased for the year ended December 31, 2022 by approximately $21.6 million to $38.8 million as compared to the comparable period ended December 31, 2021. This decrease primarily related to (i) a $7.7 million decrease in personnel expenses, primarily associated with the reduction in workforce during the strategic restructuring that began in January 2022, (ii) a decrease in stock-based compensation expense of $8.6 million, (iii) a decrease in deferred compensation expense of $3.7 million given decreases in the overall market compared to the prior year period, (iv) a decrease of $1.4 million in professional services, (v) and a decrease of $0.1 million in other general expenses. We expect our selling, general and administrative expenses to increase as our sales and marketing expenses increase due to the commercialization of ROLVEDON. Research and Development Expenses. Research and development expenses decreased for the year ended December 31, 2022 by approximately $45.1 million to $42.2 million as compared to the comparable period ended December 31, 2021. This decrease related to the reversal of an $11.2 million ROLVEDON drug substance accrual during the period. A concession was provided by Hanmi for drug substance which had been accrued during 2021 and is no longer payable. Expenses also decreased in the current period due to decreased program activities of $12.6 million for ROLVEDON, $8.1 million for poziotinib, and $2.5 million related to our early-stage compounds. Personnel expenses decreased by $10.7 million related to the reduction in workforce during the strategic restructuring that began in January 2022. Total Other Expense. Total other expense decreased for the year ended December 31, 2022 by $5.4 million as compared to the comparable period ended December 31, 2021, primarily due to a $14.4 million reduction of unrealized losses in our equity holdings compared to the prior year period. This decrease was partially offset by a $7.7 million increase in realized losses recorded during the year ended December 31, 2022 for the sale of our equity holdings in addition to a $1.4 million increased loss on our deferred compensation plan assets. Income (loss) from discontinued operations, net of income taxes. Income (loss) from discontinued operations, net of income taxes, increased by $2.9 million of income as we reversed accruals in the current period that contractually expired and for which we are no longer liable. Liquidity and Capital Resources We expect to incur future net losses as we continue to fund the advancement and commercialization of our product and product candidates. Based upon our current projections, including our intention to continue to place a disciplined focus on streamlining our business operations, we believe that our $75.1 million in aggregate cash, cash equivalents, and marketable securities as of December 31, 2022, will be sufficient to fund our current and planned operations for at least the next twelve months from the date this Annual Report is filed with the SEC. However, should our net sales prove to be less than we currently anticipate, or our cost of sales and expenses prove to be greater than we currently anticipate, or should we change our current business plan in a manner that increases or accelerates our anticipated costs and expenses, we may require additional liquidity earlier than expected. Until and unless we can generate substantial product revenue, we expect to finance our cash needs through the public or private sale of debt or equity securities, out-licensing arrangements, funding from joint-venture or strategic partners, debt financing or short-term loans, or through a combination of the foregoing. We cannot provide any assurance that we will be able to obtain additional liquidity on terms favorable to us or our current stockholders, or at all. Our liquidity and our ability to fund our capital requirements going forward are dependent, in part, on market and economic factors that are beyond our control. The Company may never achieve profitability or generate positive cash flows, and unless and until it does, the Company will continue to need to raise additional capital. As of December 31, 2022, we have approximately $128.8 million remaining to be sold pursuant to the April 2019 ATM Agreement, subject to the availability of authorized shares. On September 21, 2022, we entered into a Loan and Security Agreement (“Loan Agreement”), by and among the Company and its subsidiaries, Allos Therapeutics, Inc., Talon Therapeutics, Inc., and Spectrum Pharmaceuticals International Holdings, LLC, as borrowers, SLR Investment Corp. as administrative agent and the lenders party thereto that provides for a five-year senior secured term loan facility in an aggregate principal amount of up to $65.0 million available to us in four tranches (collectively, the “Term Loans”). As of December 31, 2022, we had drawn a total of $30.0 million of the Term Loans pursuant to the Loan Agreement, with a remaining undrawn principal balance of $25.0 million, which is available through November 15, 2023 and is subject to the achievement of certain milestone events. As we did not satisfy the Term B Loan Funding Condition, we will be unable to draw the Term B Loan of $10 million (as those terms are defined in the Loan Agreement). Refer to Note 5 of our accompanying Consolidated Financial Statements for additional information. 64 Table of Contents We have no off-balance sheet arrangements that provide financing, liquidity, market or credit risk support, or involve derivatives. In addition, we have no arrangements that may expose us to liability that are not expressly reflected in the accompanying Consolidated Financial Statements and/or notes thereto. Cash Flows The following is a discussion of cash flow activities: Year Ended December 31, (in thousands) 2022 2021 Net cash used in operating activities $ (96,989) $ (119,486) Net cash (used in) provided by investing activities $ (26,718) $ 108,711 Net cash provided by financing activities $ 75,591 $ 53,310 Operating Activities Cash flow from operating activities is derived by adjusting net earnings for interest and amortization, non-cash operating items, gains and losses attributed to investing and working capital in the ordinary course of business. Net cash used in operating activities was $97.0 million for the year ended December 31, 2022, as compared to $119.5 million for the year ended December 31, 2021. The decrease in net cash used in operating activities of $22.5 million was primarily due to a decrease in our net loss of $83.2 million, offset by the decreases in changes in operating assets and liabilities of $37.8 million and non-cash charges of $22.9 million. Investing Activities Cash flow from investing activities includes cash used for the purchases of marketable securities and proceeds from the maturity of investments and sale of equity holdings. Net cash used in investing activities was $26.7 million for the year ended December 31, 2022, as compared to $108.7 million provided by investing activities for the year ended December 31, 2021. The change of $135.4 million is primarily attributed to a decrease in the proceeds from maturities and sales of investments of $117.7 million and an increase in the purchase of investments of $17.7 million. Financing Activities Cash flow from financing activities includes proceeds from the issuance of common shares, the proceeds from the issuance of debt, net of debt acquisitions costs and from the sale of stock under our employee stock purchase plan. Net cash provided by financing activities was $75.6 million for the year ended December 31, 2022, as compared to $53.3 million for the year ended December 31, 2021. The increase of $22.3 million primarily relates to $28.7 million of proceeds from the issuance of debt, net of acquisition costs, $20 million in proceeds from the sale of shares of common stock to Hanmi, offset by a decrease in the sale of common stock under an at-the-market sales agreement of $26.1 million. Sale of Common Stock Under ATM Agreements On April 5, 2019, we entered into a new collective at-market-issuance (“ATM”) sales agreement with Cantor Fitzgerald & Co., H.C. Wainwright & Co., LLC and B. Riley FBR, Inc. (the “April 2019 ATM Agreement”), pursuant to which we may offer and sell shares of our common stock by any method deemed to be an “at the market” offering (the “ATM Offering”). From April 5, 2019 to March 2, 2020, the ATM Offering was conducted pursuant to a sales agreement prospectus filed with our automatic shelf registration statement on Form S-3ASR, filed with the SEC on April 5, 2019, which registered an aggregate offering price of $150 million under the April 2019 ATM Agreement. From May 8, 2020 to June 30, 2020, the ATM Offering was conducted pursuant to a sales agreement prospectus (the “Initial Sales Agreement Prospectus”) filed with our shelf registration statement on Form S-3, filed with the SEC on March 20, 2020, as amended by Pre-Effective Amendment No. 1 thereto, and declared effective by the SEC on May 8, 2020 (the “Registration Statement”), which registered an aggregate offering price of up to $75 million under the April 2019 ATM Agreement. On July 29, 2020, we terminated the Initial Sales Agreement Prospectus, but left the April 2019 ATM Agreement in full force and effect. On November 6, 2020, we filed a new sales agreement prospectus to the Registration Statement, which registered an aggregate offering price of up to $60 million under the April 2019 ATM Agreement. 65 Table of Contents On July 13, 2021, we filed a shelf registration statement with the SEC on Form S-3, which was declared effective by the SEC on July 21, 2021 (the “Registration Statement”). The Registration Statement registered an aggregate offering price of up to $300 million of securities that may be issued and sold by us from time to time, including up to an aggregate offering price of $150 million of common stock (which amount is included in the $300 million aggregate offering price set forth in the base prospectus) that may be issued and sold pursuant to the April 2019 ATM Agreement. As of December 31, 2022, there was approximately $128.8 million remaining to be sold pursuant to the April 2019 ATM Agreement. We sold and issued shares of our common stock under the April 2019 ATM Agreement as follows: Description of Financing Transaction No. of Common Shares Issued Proceeds Received (Net of Broker Commissions and Fees ) Common shares issued pursuant to the April 2019 ATM Agreement during the year ended December 31, 2021 15,851,391 $ 52,621 Common shares issued pursuant to the April 2019 ATM Agreement during the year ended December 31, 2022 24,513,945 $ 26,561 Critical Accounting Policies and Estimates The preparation of financial statements in conformity with GAAP requires our management to make informed estimates and assumptions that affect our reported amounts of assets, liabilities, revenues, and expenses. These amounts may materially differ from the amounts ultimately realized and reported due to the inherent uncertainty of any estimate or assumption. On an on-going basis, our management evaluates (as applicable) its most critical estimates and assumptions, including those described below: Revenue Recognition We recognize ROLVEDON revenue in accordance with Accounting Standards Codification (“ASC”) 606 – Revenue from contracts with customers. Our revenue recognition analysis consists of the following steps: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are capable of being distinct; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue as we satisfy each performance obligation. ROLVEDON became available for commercial sale and shipment to patients with a prescription in the U.S. in the fourth quarter of 2022. We sell our products to pharmaceutical wholesalers/distributors (i.e., our customers) who in turn sell our products directly to clinics, hospitals, and federal healthcare programs. Revenue from our product sales is recognized as physical delivery of product occurs (when our customer obtains control of the product), in return for agreed-upon consideration. The transaction price that we recognize for ROLVEDON revenue is our gross product sales reduced by our corresponding gross-to-net (“GTN”) estimates using the expected value method, resulting in our reported “net sales” in the accompanying Consolidated Statements of Operations. Net sales reflects the amount we ultimately expect to realize in net cash proceeds, taking into account our current period gross sales and related cash receipts, and the subsequent cash disbursements on these sales that we estimate for the various GTN categories discussed below. These estimates are based upon information received from external sources (such as written or oral information obtained from our customers with respect to their period-end inventory levels and sales to end-users during the period), in combination with management’s informed judgments. Due to the inherent uncertainty of these estimates, the actual amount incurred (of some, or all) of product returns, government chargebacks, prompt pay discounts, commercial rebates, Medicaid rebates, and distribution, data, and GPO administrative fees may be above or below the amount estimated, then requiring prospective adjustments to our reported net sales. These GTN estimate categories (that comprise our GTN liabilities) are each discussed below: Product Returns Allowances: Our customers are contractually permitted to return certain purchased products within the contractual allowable time before/after the applicable expiration date. Returns outside of this aforementioned criteria are not customarily allowed. We estimate expected product returns using our expected return rates. Returned product is typically destroyed since substantially all are due to imminent expiry and cannot be resold. Government Chargebacks: Our products are subject to pricing limits under certain federal government programs (e.g., Medicare and 340B Drug Pricing Program). Qualifying entities (i.e., end-users) purchase products from our customers at their qualifying discounted price. The chargeback amount we incur represents the difference between our contractual sales price to our customer, and the end-user’s applicable discounted purchase price under the government program. There may be significant 66 Table of Contents lag time between our reported net product sales and our receipt of the corresponding government chargeback claims from our customers. Prompt Pay Discounts: Discounts for prompt payment are estimated at the time of sale, based on our eligible customers’ prompt payment history and the contractual discount percentage. Commercial Rebates: Commercial rebates are based on (i) our estimates of end-user purchases through a GPO, (ii) the corresponding contractual rebate percentage tier we expect each GPO to achieve, and (iii) our estimates of the impact of any prospective rebate program changes made by us. Medicaid Rebates: Our products are subject to state government-managed Medicaid programs, whereby rebates are issued to participating state governments. These rebates arise when a patient treated with our product is covered under Medicaid, resulting in a discounted price for our product under the applicable Medicaid program. Our Medicaid rebate accrual calculations require us to project the magnitude of our sales, by state, that will be subject to these rebates. There is a significant time lag in our receiving rebate notices from each state (generally several months or longer after our sale is recognized). Our estimates are based on our historical claim levels by state, as supplemented by management’s judgment. Distribution, Data, and GPO Administrative Fees: Distribution, data, and GPO administrative fees are paid to authorized wholesalers/distributors of our products for various commercial services including: contract administration, inventory management, delivery of end-user sales data, and product returns processing. These fees are based on a contractually-determined percentage of our applicable sales. Stock-Based Compensation Stock-based compensation expense for equity awards granted to our employees and members of our Board of Directors is recognized on a straight- line basis over each award’s vesting period. Recognized compensation expense is net of an estimated forfeiture rate, representing the percentage of awards that are expected to be forfeited prior to vesting, and is ultimately adjusted for actual forfeitures. We use the Black-Scholes option pricing model to determine the fair value of stock options and stock appreciation rights (as of the date of grant) that have service conditions for vesting. The recognition of stock-based compensation expense and the initial calculation of stock option fair value requires certain assumptions, including (a) the pre-vesting forfeiture rate of the award, (b) the expected term that the stock option will remain outstanding, (c) our stock price volatility over the expected term (and that of our designated peer group with respect to certain market-based awards), (d) zero dividend yield, and (e) the prevailing risk-free interest rate for the period matching the expected term. With regard to (a)-(e) above: we estimate forfeiture rates based on our employees’ overall forfeiture history, which we believe will be representative of future results. We estimate the expected term of stock options granted based on our employees’ historical exercise patterns, which we believe will be representative of their future behavior. We estimate the volatility of our common stock on the date of grant based on the historical volatility of our common stock for a look-back period that corresponds with the expected term. We estimate the risk-free interest rate based upon the U.S. Department of the Treasury yields in effect at award grant, for a period equaling the expected term of the stock option and we estimate a zero dividend yield. Due to the inherent uncertainty of these estimates, the actual amounts incurred may be above or below the amount estimated, then requiring prospective adjustments to our stock-based compensation expense. Research and Development Costs Our research and development costs are expensed as incurred. Research and development costs consist primarily of salaries, benefits, and other staff- related costs including associated stock-based compensation, laboratory supplies, clinical trial and related clinical manufacturing costs, costs related to manufacturing preparations, fees paid to other entities that conduct certain research and development activities on our behalf and payments made pursuant to license agreements. Clinical trial and other development costs incurred by third parties are expensed as the contracted work is performed. We accrue for costs incurred as the services are being provided by monitoring the status of activities and the invoices received from its external service providers. We adjust our accruals as actual costs become known. Where contingent milestone payments are due to third parties under research and development or license agreements, the milestone payment obligations are expensed when the clinical or regulatory milestone results are achieved. Item 7A. Quantitative And Qualitative Disclosures About Market Risk Not applicable. 67 Table of Contents Item 8. Financial Statements And Supplementary Data Spectrum Pharmaceuticals, Inc. Index to Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm (PCAOB ID 49) F-2 Consolidated Balance Sheets as of December 31, 2022 and 2021 F-4 Consolidated Statements of Operations for the years ended December 31, 2022 and 2021 F-5 Consolidated Statements of Comprehensive Loss for the years ended December 31, 2022 and 2021 F-6 Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2022 and 2021 F-7 Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021 F-8 Notes to Consolidated Financial Statements F-9 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Spectrum Pharmaceuticals, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Spectrum Pharmaceuticals, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for the years then ended, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Gross-to Net-Adjustments to Rolvedon Revenue As described in Note 2 to the financial statements, revenue from product sales is recorded net of adjustments for estimated product returns allowance, government chargebacks, Medicaid rebates, commercial rebates, distribution, data and Group Purchasing Organization (GPO) fees, and other deductions. In particular, management estimates (1) product returns allowance at each reporting period for products that customers are contractually permitted to return during a contractual allowable period, and (2) rebates based on management estimates of end-user purchase through GPO and corresponding expected contractual rebate percentage tier. Provisions for these adjustments are recorded in the period in which the related revenue is recorded and are presented either as a reduction of accounts receivable or as an accrued liability in the Company’s consolidated balance sheet. As of December 31, 2022, the Company has recorded a reduction of accounts receivable of $1.3 million and accrued liabilities of $3.1 million relating to gross-to-net adjustments to revenue. We identified the estimates for gross-to-net (GTN) adjustments to revenue as a critical audit matter, specifically product returns allowance and rebates, due to the judgmental nature of the assumptions used by management in preparing the estimates. In particular management is required to estimate the product returns allowance for products that are contractually within the allowable return period, and the amount of rebate adjustments that would be applied to products that remain in the distribution channel at December 31, 2022, The Company has a limited history upon which to base such estimates, and changes in the estimated payor and channel mix can have a material effect on the amount of estimates recorded. Auditing management’s assumptions such as the product returns allowance rate and discount percentages used in the rebate amounts was complex and required a high degree of auditor judgment and subjectivity when performing audit procedures and evaluating the audit evidence obtained. Our audit procedures related to the Company’s returns reserve allowance and rebate adjustment to revenue included the following, among others: • We tested the completeness and accuracy of the report used in calculating rebates by tracing products sold to the underlying revenue details F-2 Table of Contents • On a sample basis, we traced discount percentages used to calculate the GTN adjustments to related customer and GPO contracts • We evaluated the reasonableness of the product return allowance by comparing the product returns allowance rate used by management to available industry data and trends • We evaluated the reasonableness of product returns allowance by reviewing actual product returns subsequent to the balance sheet date to determine consistency with management expectation /s/ RSM US LLP We have served as the Company's auditor since 2021. Los Angeles, California March 31, 2023 F-3 Table of Contents SPECTRUM PHARMACEUTICALS, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share and par value amounts) December 31, 2022 2021 ASSETS Current assets: Cash and cash equivalents $ 40,368 $ 88,539 Marketable securities 34,728 12,108 Accounts receivable, net 12,996 — Other receivables 617 1,028 Inventories 9,230 — Prepaid expenses and other current assets 3,072 2,277 Total current assets 101,011 103,952 Property and equipment, net 476 455 Facility and equipment under lease 1,694 2,505 Other assets 157 4,636 Total assets $ 103,338 $ 111,548 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and other accrued liabilities $ 38,105 $ 41,258 Accrued payroll and benefits 4,580 11,971 Total current liabilities 42,685 53,229 Loan payable, long-term 28,666 — Other long-term liabilities 4,099 10,766 Total liabilities 75,450 63,995 Commitments and contingencies (Note 8) Stockholders’ equity: Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding — — Common stock, $0.001 par value; 300,000,000 shares authorized; 202,827,831 and 164,502,013 issued and outstanding at December 31, 2022 and 2021, respectively 203 165 Additional paid-in capital 1,149,926 1,094,353 Accumulated other comprehensive loss (2,917) (3,042) Accumulated deficit (1,119,324) (1,043,923) Total stockholders’ equity 27,888 47,553 Total liabilities and stockholders’ equity $ 103,338 $ 111,548 See accompanying notes to these consolidated financial statements. F-4 Table of Contents SPECTRUM PHARMACEUTICALS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share amounts) Year Ended December 31, 2022 2021 Net sales $ 10,114 $ — Expenses: Cost of sales 1,792 — Selling, general and administrative 38,816 60,406 Research and development 42,203 87,297 Total expenses 82,811 147,703 Loss from continuing operations before other income (expense) and income taxes (72,697) (147,703) Other income (expense): Interest income 968 215 Interest expense (998) (52) Other expense, net (5,331) (10,892) Total other expense (5,361) (10,729) Loss from continuing operations before income taxes (78,058) (158,432) Provision for income taxes from continuing operations (46) (4) Loss from continuing operations (78,104) (158,436) Income (loss) from discontinued operations, net of income taxes 2,703 (192) Net loss $ (75,401) $ (158,628) Basic and diluted income (loss) per share: Loss per common share from continuing operations $ (0.43) $ (1.02) Income per common share from discontinued operations $ 0.01 $ — Net loss per common share, basic and diluted $ (0.41) $ (1.02) Weighted average shares outstanding, basic and diluted 183,237,200 154,861,704 See accompanying notes to these consolidated financial statements. F-5 Table of Contents SPECTRUM PHARMACEUTICALS, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In thousands) Year Ended December 31, 2022 2021 Net loss $ (75,401) $ (158,628) Other comprehensive (loss) income: Unrealized loss on available-for-sale securities, net of tax (11) (1,147) Foreign currency translation adjustments 136 (66) Other comprehensive income (loss) 125 (1,213) Total comprehensive loss $ (75,276) $ (159,841) See accompanying notes to these consolidated financial statements. F-6 Table of Contents SPECTRUM PHARMACEUTICALS, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In thousands, except share data) Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders' Equity Shares Amount Balance as of December 31, 2020 146,083,110 $ 146 $ 1,021,221 $ (1,829) $ (885,295) $ 134,243 Net loss — — — — (158,628) (158,628) Other comprehensive loss — — — (1,213) — (1,213) Recognition of stock-based compensation expense — — 19,839 — — 19,839 Issuance of common shares under an at-the-market sales agreement 15,851,391 16 52,605 — — 52,621 Issuance of common stock for employee stock purchase plan 358,007 1 684 — — 685 Issuance of common stock upon exercise of stock options 1,250 — 4 — — 4 Restricted stock award grants, net of forfeitures 2,206,869 2 — — — 2 Issuance of common stock upon vesting of restricted stock units 1,386 — — — — — Balance as of December 31, 2021 164,502,013 $ 165 $ 1,094,353 $ (3,042) $ (1,043,923) $ 47,553 Net loss — — — — (75,401) (75,401) Other comprehensive income, net — — — 125 — 125 Recognition of stock-based compensation expense — — 8,490 — — 8,490 Issuance of common shares to Hanmi Pharmaceutical Co., Ltd. 12,500,000 12 19,988 — — 20,000 Issuance of common shares pursuant to at-the-market offering, net 24,513,945 25 26,536 — — 26,561 Issuance of common stock for employee stock purchase plan 619,372 1 329 — — 330 Restricted stock award grants, net of forfeitures 407,488 — — — — — Issuance of common stock upon vesting of performance units 150,000 — — — — — Issuance of warrants upon debt financing — — 230 — — 230 Issuance of common stock upon vesting of restricted stock units 135,013 — — — — — Balance as of December 31, 2022 202,827,831 $ 203 $ 1,149,926 $ (2,917) $ (1,119,324) $ 27,888 See accompanying notes to these consolidated financial statements. F-7 Table of Contents SPECTRUM PHARMACEUTICALS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended December 31, 2022 2021 Cash Flows From Operating Activities: Loss from continuing operations $ (78,104) $ (158,436) Income (loss) from discontinued operations, net of income taxes 2,703 (192) Net loss (75,401) (158,628) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 248 286 Amortization of debt discount 195 — Stock-based compensation 8,490 19,841 Loss on disposal of manufacturing equipment — 3,057 Non-cash lease expense 705 1,624 Amortization of premium (discount) on debt securities (467) 393 Realized loss (gain) on mutual funds 17 (630) Realized loss (gain) on sale of equity holdings 1,346 (5,722) Unrealized loss on equity holdings 2,919 17,266 Unrealized loss from transactions denominated in foreign currency 76 460 Other non-cash items 105 (80) Loss on disposal of assets 2 — Changes in operating assets and liabilities: Accounts receivable, net (12,996) 66 Other receivables 399 1,444 Inventories (9,230) — Prepaid expenses and other current assets (795) 1,884 Other assets 4,479 (310) Accounts payable and other accrued liabilities (3,709) (3,513) Accrued payroll and benefits (7,391) 2,596 Other long-term liabilities (5,981) 480 Net cash used in operating activities (96,989) (119,486) Cash Flows From Investing Activities: Proceeds from maturities of investments 5,967 119,814 Proceeds from sale of equity holdings 2,166 5,974 Purchases of investments (34,578) (16,856) Purchases of property and equipment, net (273) (221) Net cash (used in) provided by investing activities (26,718) 108,711 Cash Flows From Financing Activities: Proceeds from the issuance of debt, net of debt acquisition costs 28,700 — Issuance of common shares to Hanmi Pharmaceutical Co., Ltd. 20,000 — Proceeds from sale of common stock under an at-the-market sales agreement, net 26,561 52,621 Proceeds from employees for exercises of stock options — 4 Proceeds from sale of stock under employee stock purchase plan 330 685 Net cash provided by financing activities 75,591 53,310 Effect of exchange rates on cash and cash equivalents (55) (5) Net (decrease) increase in cash and cash equivalents (48,171) 42,530 Cash and cash equivalents — beginning of year 88,539 46,009 Cash and cash equivalents — end of year $ 40,368 $ 88,539 Supplemental Disclosure of Cash Flow Information: Cash paid for facility and equipment under operating leases $ 1,693 $ 2,116 Cash paid for income taxes $ 39 $ 12 Cash paid for interest $ 792 $ — Supplemental disclosure of cash flow information-Non-cash: Issuance of warrants in connection with debt financing $ 230 $ — See accompanying notes to these consolidated financial statements. F-8 Notes to Consolidated Financial Statements (all tabular amounts presented in thousands, except share, per share, per unit, and number of years) NOTE 1. DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, AND OPERATING SEGMENT (a) Description of Business Spectrum Pharmaceuticals, Inc. (“Spectrum,” the “Company,” “we,” “our,” or “us”) is a commercial-stage biopharmaceutical company, with a strategy of acquiring, developing, and commercializing novel and targeted oncology therapies. We have an in-house clinical development organization with regulatory and data management capabilities, in addition to commercial infrastructure and a field based sales force for our marketed product, ROLVEDON™ (formerly known as eflapegrastim). We have one commercial asset and one drug candidate in late-stage development: • ROLVEDON™ is a novel long-acting granulocyte colony-stimulating factor (“G-CSF”) for the treatment of chemotherapy-induced neutropenia. On April 11, 2022, we announced that we had received notice that the Biologics License Application (“BLA”) for ROLVEDON had been accepted for filing and received a Prescription Drug User Fee Act (“PDUFA”) date of September 9, 2022. On September 9, 2022, we received the U.S. Food and Drug Administration’s (“FDA”) marketing approval for ROLVEDON and began commercialization activities in the fourth quarter of 2022; and • Poziotinib is a novel irreversible TKI under investigation for non-small cell lung cancer (“NSCLC”) tumors with various mutations. On December 6, 2021, we announced we submitted our New Drug Application (“NDA”) for poziotinib to the FDA for use in patients with previously treated locally advanced or metastatic NSCLC with HER2 exon 20 insertion mutations. The NDA submission is based on the positive results of Cohort 2 from the ZENITH20 clinical trial, which assessed the safety and efficacy of poziotinib. The product candidate received fast track designation from the FDA and there is currently no treatment specifically approved by the FDA for this indication. On February 11, 2022, we announced that we received notice from the FDA that the NDA was accepted for filing and received a PDUFA action date of November 24, 2022. On September 22, 2022, we met with the FDA’s Oncologic Drugs Advisory Committee (“ODAC”). The ODAC voted 9 (no) - 4 (yes) that the current benefits of poziotinib did not outweigh its risks for the treatment of patients with NSCLC with HER2 exon 20 insertion mutations. On November 25, 2022, we announced that we had received a Complete Response Letter (“CRL”) from the FDA regarding our NDA. The CRL stated that the FDA determined that it could not approve the NDA in its present form and provided recommendations needed for resubmission, including generating additional data from a randomized controlled study prior to approval. We are continuing to evaluate these recommendations but we have de- prioritized further poziotinib development activities. Our business strategy is the development of late-stage assets through commercialization and the sourcing of additional assets that are synergistic with our existing portfolio (through purchase acquisitions, in-licensing transactions, or co-development and marketing arrangements). (b) Basis of Presentation Principles of Consolidation The accompanying Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and with the rules and regulations of the Securities and Exchange Commission (“SEC”). These consolidated financial statements include the financial position, results of operations, and cash flows of Spectrum and its subsidiaries, all of which are wholly-owned. All inter-company accounts and transactions among these legal entities have been eliminated in consolidation. Substantially all of the accumulated other comprehensive loss is comprised of foreign currency translation adjustments at December 31, 2022. The consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will continue in operational existence for the foreseeable future. Foreign Currency Translation Operations in non-U.S. entities are recorded in the functional currency of each entity. For financial reporting purposes, the functional currency of an entity is determined by a review of the source of an entity's most predominant cash flows. The results of operations for any non-U.S. dollar functional currency entities are translated from functional currencies into U.S. dollars using the average currency rate during each month. Assets and liabilities are translated using currency rates at the end of the period. Adjustments resulting from translating the financial statements of our foreign entities that use their local currency as the functional currency into U.S. dollars are reflected as a component of other comprehensive income (loss). Transaction gains and losses are recorded in other income (expense), net, in the consolidated statements of operations. F-9 Notes to Consolidated Financial Statements (all tabular amounts presented in thousands, except share, per share, per unit, and number of years) Discontinued Operations - Sale of our Commercial Product Portfolio In March 2019, we completed the sale of our Commercial Product Portfolio (as defined below in Note 10) to Acrotech Biopharma LLC (“Acrotech”) (the “Commercial Product Portfolio Transaction”). In accordance with applicable GAAP (Accounting Standards Codification, “ASC”, 205-20, Presentation of Financial Statements), the revenue-deriving activities and allocable expenses of our sold commercial operations, connected to the Commercial Product Portfolio, are separately classified as “discontinued” for all periods presented within the accompanying Consolidated Statements of Operations. Liquidity and Capital Resources We expect to incur future net losses as we continue to fund the advancement and commercialization of our product and product candidates. Based upon our current projections, including our intention to continue to place a disciplined focus on streamlining our business operations, we believe that our $75.1 million in aggregate cash, cash equivalents, and marketable securities as of December 31, 2022 will be sufficient to fund our current and planned operations for at least the next twelve months from the date this Annual Report is filed with the SEC. However, should our net sales prove to be less than we currently anticipate, or our costs and expenses prove to be greater than we currently anticipate, or should we change our current business plan in a manner that increases or accelerates our anticipated costs and expenses, we may require additional liquidity earlier than expected. Until and unless we can generate substantial product revenue, we expect to finance our cash needs through the public or private sale of debt or equity securities, out-licensing arrangements, funding from joint-venture or strategic partners, debt financing or short-term loans, or through a combination of the foregoing. We cannot provide any assurance that we will be able to obtain additional liquidity on terms favorable to us or our current stockholders, or at all. Our liquidity and our ability to fund our capital requirements going forward are dependent, in part, on market and economic factors that are beyond our control. The Company may never achieve profitability or generate positive cash flows, and unless and until it does, the Company will continue to need to raise additional capital. As of December 31, 2022, we have approximately $128.8 million remaining to be sold pursuant to the April 2019 ATM Agreement, subject to the availability of authorized shares. On September 21, 2022, we entered into a Loan and Security Agreement (“Loan Agreement”), by and among the Company and its subsidiaries, Allos Therapeutics, Inc., Talon Therapeutics, Inc., and Spectrum Pharmaceuticals International Holdings, LLC, as borrowers (together with the Company, the “Borrowers”), SLR Investment Corp. (“SLR”), as administrative agent (the “Agent”), and the lenders party thereto (the “Lenders”) that provides for a five- year senior secured term loan facility in an aggregate principal amount of up to $65.0 million available to us in four tranches (collectively, the “Term Loans”). As of December 31, 2022, we had drawn a total of $30.0 million of the Term Loans pursuant to the Loan Agreement, with a remaining undrawn principal balance of $25.0 million, which is available through November 15, 2023 and is subject to the achievement of certain milestone events. As we did not satisfy the Term B Loan Funding Condition we will be unable to draw the Term B Loan of $10.0 million (as those terms are defined in the Loan Agreement). Refer to Note 5 for additional information. (c) Operating Segment We operate one reportable operating segment that is focused exclusively on developing and marketing oncology and hematology drug products. For the years ended December 31, 2022 and 2021, all of our operating costs and expenses were solely attributable to these activities (and as applicable, classified as “discontinued” within the accompanying Consolidated Statements of Operations). NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES The preparation of financial statements in conformity with GAAP requires our management to make informed estimates and assumptions that affect our reported amounts of assets, liabilities, revenues, and expenses. These amounts may materially differ from the amounts ultimately realized and reported due to the inherent uncertainty of any estimate or assumption. On an on-going basis, our management evaluates (as applicable) its most critical estimates and assumptions, including those described below: (i) Revenue Recognition We recognize ROLVEDON revenue in accordance with ASC 606 – Revenue from contracts with customers. Our revenue recognition analysis consists of the following steps: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are capable of being distinct; (iii) F-10 Notes to Consolidated Financial Statements (all tabular amounts presented in thousands, except share, per share, per unit, and number of years) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue as we satisfy each performance obligation. ROLVEDON became available for commercial sale and shipment to patients with a prescription in the U.S. in the fourth quarter of 2022. We sell our products to pharmaceutical wholesalers/distributors (i.e., our customers) who in turn sell our products directly to clinics, hospitals, and federal healthcare programs. Revenue from our product sales is recognized as physical delivery of product occurs (when our customer obtains control of the product), in return for agreed-upon consideration. The transaction price that we recognize for ROLVEDON revenue is our gross product sales reduced by our corresponding gross-to-net (“GTN”) estimates using the expected value method, resulting in our reported “net sales” in the accompanying Consolidated Statements of Operations. Net sales reflects the amount we ultimately expect to realize in net cash proceeds, taking into account our current period gross sales and related cash receipts, and the subsequent cash disbursements on these sales that we estimate for the various GTN categories discussed below. These estimates are based upon information received from external sources (such as written or oral information obtained from our customers with respect to their period-end inventory levels and sales to end-users during the period), in combination with management’s informed judgments. Due to the inherent uncertainty of these estimates, the actual amount incurred (of some, or all) of product returns, government chargebacks, prompt pay discounts, commercial rebates, Medicaid rebates, and distribution, data, and GPO administrative fees may be above or below the amount estimated, then requiring prospective adjustments to our reported net sales. These GTN estimate categories (that comprise our GTN liabilities) are each discussed below: Product Returns Allowances: Our customers are contractually permitted to return certain purchased products within the contractual allowable time before/after the applicable expiration date. Returns outside of this aforementioned criteria are not customarily allowed. We estimate expected product returns using our expected return rates. Returned product is typically destroyed since substantially all are due to imminent expiry and cannot be resold. Government Chargebacks: Our product is subject to pricing limits under certain federal government programs (e.g., Medicare, Medicaid, and 340B Drug Pricing Program). Qualifying entities (i.e., end-users) purchase products from our customers at their qualifying discounted price. The chargeback amount we incur represents the difference between our contractual sales price to our customer, and the end-user’s applicable discounted purchase price under the government program. There may be significant lag time between our reported net product sales and our receipt of the corresponding government chargeback claims from our customers. Prompt Pay Discounts: Discounts for prompt payment are estimated at the time of sale, based on our eligible customers’ prompt payment history and the contractual discount percentage. Commercial Rebates: Commercial rebates are based on (i) our estimates of end-user purchases through a GPO, (ii) the corresponding contractual rebate percentage tier we expect each GPO to achieve, and (iii) our estimates of the impact of any prospective rebate program changes made by us. Medicaid Rebates: Our product is subject to state government-managed Medicaid programs, whereby rebates are issued to participating state governments. These rebates arise when a patient treated with our product is covered under Medicaid, resulting in a discounted price for our product under the applicable Medicaid program. Our Medicaid rebate accrual calculations require us to project the magnitude of our sales, by state, that will be subject to these rebates. There is a significant time lag in our receiving rebate notices from each state (generally several months or longer after our sale is recognized). Our estimates are based on our historical claim levels of similar products by state, as supplemented by management’s judgment. Distribution, Data, and GPO Administrative Fees: Distribution, data, and GPO administrative fees are paid to authorized wholesalers/distributors of our products for various commercial services including: contract administration, inventory management, delivery of end-user sales data, and product returns processing. These fees are based on a contractually-determined percentage of our applicable sales. (ii) Cash and Cash Equivalents Cash and cash equivalents consist of bank deposits and highly liquid investments with maturities of three months or less from the purchase date. F-11 Notes to Consolidated Financial Statements (all tabular amounts presented in thousands, except share, per share, per unit, and number of years) (iii) Marketable Securities Marketable securities consist of our holdings in equity securities (including mutual funds), bank CDs, government-related debt securities, and corporate debt securities. For equity securities and mutual funds, any realized or unrealized gains (losses) are recognized in “other income (expense), net” within the Consolidated Statements of Operations. Debt securities and bank CDs are classified as “available-for-sale” investments and (1) realized gains (losses) are recognized in “other income (expense), net” within the Consolidated Statements of Operations and (2) unrealized gains (losses) are recognized as a component of “accumulated other comprehensive loss” within the Consolidated Statements of Stockholders’ Equity. (iv) Accounts Receivable, net In general, accounts receivable consists of amounts due from customers, net of customer allowances for cash discounts, product returns and chargebacks. As of December 31, 2022, these allowances amounted to $1.3 million. Our contracts with customers have standard payment terms. As of December 31, 2022, the majority of our sales were to the top three wholesalers. We analyze accounts that are past due for collectability, and regularly evaluate the creditworthiness of our customers so that we can properly assess and respond to changes in their credit profiles. As of December 31, 2022, we determined an allowance for expected credit losses related to outstanding accounts receivable was currently not required based upon our review of contractual payment terms and individual customer circumstances. (v) Inventory We value our inventory at the lower of cost or net realizable value. Inventory cost is determined on a first-in, first-out basis. We regularly review our inventory quantities and when appropriate record a provision for obsolete and excess inventory to derive its new cost basis, which takes into account our sales forecast and corresponding expiry dates. We have not recognized a provision for obsolete and excess inventory as of December 31, 2022. We received FDA approval for ROLVEDON on September 9, 2022, and on that date began capitalizing inventory purchases of saleable product from certain suppliers. Prior to FDA approval, all saleable product purchased from such suppliers were included as a component of research and development expense, as we were unable to assert that the inventory had future economic benefit until we had received FDA approval. Prior to FDA approval, costs estimated at approximately $5.7 million for commercially saleable product and materials were incurred and included in research and development expenses. If we were to have included those costs previously expensed as a component of cost of sales, our cost of sales for the year ended December 31, 2022 would have been $3.0 million. As a result, cost of sales related to ROLVEDON will initially reflect a lower average per unit cost of materials over the next approximately nine months as previously expensed inventory is utilized for commercial production and sold to customers. (vi) Property and Equipment, Net Our property and equipment, net, is stated at historical cost, and is depreciated on a straight-line basis over an estimated useful life that corresponds with its designated asset category. We evaluate the recoverability of long-lived assets (which includes property and equipment) whenever events or changes in circumstances in our business indicate that the asset’s carrying amount may not be recoverable. Recoverability is measured by a comparison of the carrying amount to the undiscounted cash flows expected to be generated by the asset group. An impairment loss would be recorded for the excess of net carrying value over the fair value of the asset impaired. The fair value is estimated based on expected discounted future cash flows or other methods such as orderly liquidation value based on assumptions of asset class and observed market data. (vii) Cost of Sales Cost of sales includes the cost of the inventory sold, which includes direct manufacturing, production and packaging materials, shipping expenses, and royalty fees owed to our licensing partner for ROLVEDON sales. Prior to FDA approval in September 2022, we expensed approximately $5.7 million in costs associated with the manufacturing of ROLVEDON as a component of research and development expense. Therefore these costs are not included in cost of sales. (viii) Stock-Based Compensation Stock-based compensation expense for equity awards granted to our employees and members of our Board of Directors is recognized on a straight- line basis over each award’s vesting period. Recognized compensation expense is net of an estimated forfeiture rate, representing the percentage of awards that are expected to be forfeited prior to vesting, and is ultimately adjusted F-12 Notes to Consolidated Financial Statements (all tabular amounts presented in thousands, except share, per share, per unit, and number of years) for actual forfeitures. We use the Black-Scholes option pricing model to determine the fair value of stock options and stock appreciation rights (as of the date of grant) that have service conditions for vesting. The recognition of stock-based compensation expense and the initial calculation of stock option fair value requires certain assumptions, including (a) the pre-vesting forfeiture rate of the award, (b) the expected term that the stock option will remain outstanding, (c) our stock price volatility over the expected term (and that of our designated peer group with respect to certain market-based awards), (d) zero dividend yield, and (e) the prevailing risk-free interest rate for the period matching the expected term. With regard to (a)-(e) above: we estimate forfeiture rates based on our employees’ overall forfeiture history, which we believe will be representative of future results. We estimate the expected term of stock options granted based on our employees’ historical exercise patterns, which we believe will be representative of their future behavior. We estimate the volatility of our common stock on the date of grant based on the historical volatility of our common stock for a look-back period that corresponds with the expected term. We estimate the risk-free interest rate based upon the U.S. Department of the Treasury yields in effect at award grant, for a period equaling the expected term of the stock option and we estimate a zero dividend yield. Due to the inherent uncertainty of these estimates, the actual amounts incurred may be above or below the amount estimated, then requiring prospective adjustments to our stock-based compensation expense. (ix) Basic and Diluted Net Loss per Share We calculate basic and diluted net loss per share using the weighted average number of common shares outstanding during the periods presented. In periods of a net loss, basic and diluted loss per share is the same. For the diluted earnings per share calculation, we adjust the weighted average number of common shares outstanding to include only stock options, warrants, and other common stock equivalents outstanding during the period to the extent that they are dilutive. There were 22.3 million shares and 13.5 million shares of outstanding securities (including stock options, restricted stock units, unvested restricted stock awards, stock appreciation rights, warrants and performance awards) as of December 31, 2022 and 2021, respectively, that were excluded from the calculation of diluted net loss per share because their inclusion would have been anti-dilutive. (x) Income Taxes Deferred tax assets and liabilities are recorded based on the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the financial statements, as well as operating losses and tax credit carry forwards using enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain. Our effective tax rate differs from the U.S. federal statutory tax rate primarily as a result of nondeductible expenses and the impact of a valuation allowance on our deferred tax assets, which we record because we believe that, based upon a weighting of positive and negative factors, it is more likely than not that these deferred tax assets will not be realized. If/when we were to determine that our deferred tax assets are realizable, an adjustment to the corresponding valuation allowance would increase our net income or reduce our net loss in the period that such determination was made. In the event that we are assessed interest and/or penalties from taxing authorities that have not been previously accrued, such amounts would be included in “provision for income taxes from continuing operations” within the accompanying Consolidated Statements of Operations for the period in which we received the notice. (xi) Research and Development Expenses Our research and development costs are expensed as incurred. Research and development costs consist primarily of salaries, benefits, and other staff- related costs including associated stock-based compensation, laboratory supplies, clinical trial and related clinical manufacturing costs, costs related to manufacturing preparations, fees paid to other entities that conduct certain research and development activities on our behalf and payments made pursuant to license agreements. Clinical trial and other development costs incurred by third parties are expensed as the contracted work is performed. We accrue for costs incurred as the services are being provided by monitoring the status of activities and the invoices received from our external service providers. We adjust our accruals as actual costs become known. Where contingent milestone payments are due to third parties under research and development or license agreements, the milestone payment obligations are expensed in the earliest period that we determine the respective milestone achievement is probable or has occurred. F-13 Notes to Consolidated Financial Statements (all tabular amounts presented in thousands, except share, per share, per unit, and number of years) (xii) Debt Issuance Costs Debt issuance costs incurred in connection with the Term Loan is classified on the consolidated balance sheet as a direct deduction from the carrying amount of the related debt liability. These expenses are deferred and amortized as part of interest expense in the consolidated statement of operations using the effective interest rate method over the term of the debt agreement. Refer to Note 5 for additional information on the Term Loan. (xiii) Fair Value Measurements We determine measurement-date fair value based on the proceeds that would be received through the sale of the asset, or that we would pay to settle or transfer the liability, in an orderly transaction between market participants. We utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used to measure fair value. These tiers include the following: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that are publicly accessible at the measurement date. Level 2: Observable prices that are based on inputs not quoted on active markets, but that are corroborated by market data. These inputs may include quoted prices for similar assets or liabilities or quoted market prices in markets that are not active to the general public. Level 3: Unobservable inputs are used when little or no market data is available. (xiv) Recently Issued Accounting Standards In June 2022, the FASB issued Accounting Standards Update No. 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. This standard clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. This standard becomes effective for us on January 1, 2024, and is not expected to have a material impact on our consolidated financial statements and related disclosures. There are several other new accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”), which we do not believe had or will have a material impact on our consolidated financial statements. NOTE 3. FAIR VALUE MEASUREMENTS The table below summarizes certain asset and liability fair values that are included within our accompanying Consolidated Balance Sheets, and their designations among the three fair value measurement categories: December 31, 2022 Fair Value Measurements Level 1 Level 2 Level 3 Total Assets: Money market funds $ 36,298 $ — $ — $ 36,298 Equity securities 136 — — 136 Government-related debt securities 30,348 — — 30,348 Mutual funds 4,244 8 — 4,252 $ 71,026 $ 8 $ — $ 71,034 Liabilities: Deferred executive compensation liability $ — $ 4,531 $ — $ 4,531 $ — $ 4,531 $ — $ 4,531 Included $1.5 million within accounts payable and other accrued liabilities and $3.0 million within other long-term liabilities on our Consolidated Balance Sheets. (1) (1) F-14 Notes to Consolidated Financial Statements (all tabular amounts presented in thousands, except share, per share, per unit, and number of years) December 31, 2021 Fair Value Measurements Level 1 Level 2 Level 3 Total Assets: Equity securities $ 5,718 $ — $ — $ 5,718 Money market funds 66,322 — — 66,322 Mutual funds 6,390 9 — 6,399 Key employee life insurance, cash surrender value — 4,507 — 4,507 $ 78,430 $ 4,516 $ — $ 82,946 Liabilities: Deferred executive compensation liability $ — $ 11,243 $ — $ 11,243 $ — $ 11,243 $ — $ 11,243 Included within other assets on our Consolidated Balance Sheets, and the amount is based on the stated cash surrender value of life insurance policies of named current and former employees at each period-end. Included $2.0 million within accounts payable and other accrued liabilities and $9.2 million within other long-term liabilities on our Consolidated Balance Sheets. Our carrying amounts of financial instruments such as cash equivalents, accounts receivable, prepaid expenses, accounts payable and other accrued liabilities approximate their fair values due to their short-term nature of settlement. In addition, at December 31, 2022, the Company believed the carrying value of debt approximates fair value as the interest rates were reflective of the rate the Company could obtain on debt with similar terms and conditions. NOTE 4. BALANCE SHEET ACCOUNT DETAIL The composition of selected financial statement captions that comprise the accompanying Consolidated Balance Sheets are summarized below: (a) Cash and Cash Equivalents and Marketable Securities We maintain cash balances with select major financial institutions. The Federal Deposit Insurance Corporation (“FDIC”) and other third parties insure a fraction of these deposits. Accordingly, these cash deposits are not insured against the possibility of a substantial or complete loss of principal and are inherently subject to the credit risk of the corresponding financial institution. Our investment policy requires that purchased investments may only be in highly-rated and liquid financial instruments and limits our holdings of any single issuer (excluding any debt or equity securities that may be received from our strategic partners in connection with an out-license arrangement). The carrying amount of our equity securities and money market funds approximate their fair value (utilizing “Level 1” or “Level 2” inputs) because of our ability to immediately convert these instruments into cash with minimal expected change in value. There were no material unrealized losses on our investment securities at December 31, 2022 or 2021. (1) (2) (1) (2) F-15 Notes to Consolidated Financial Statements (all tabular amounts presented in thousands, except share, per share, per unit, and number of years) The following is a summary of our presented composition of “cash and cash equivalents” and “marketable securities”: Historical or Amortized Cost Fair Value Cash and Cash Equivalents Marketable Securities December 31, 2022 Money market funds $ 36,298 $ 36,298 $ 36,298 $ — Equity securities — 136 — 136 Government-related debt securities 30,359 30,348 — 30,348 Mutual funds 3,395 4,244 — 4,244 Bank deposits 4,070 4,070 4,070 — Total cash and cash equivalents and marketable securities $ 74,122 $ 75,096 $ 40,368 $ 34,728 December 31, 2021 Money market funds $ 66,322 $ 66,322 $ 66,322 $ — Equity securities 3,512 5,718 — 5,718 Mutual funds 5,218 6,390 — 6,390 Bank deposits 22,217 22,217 22,217 — Total cash and cash equivalents and marketable securities $ 97,269 $ 100,647 $ 88,539 $ 12,108 Our aggregate equity holdings consist of 0.3 million common shares of Unicycive Therapeutics, Inc., a NASDAQ-listed biopharmaceutical company, with a fair market value of $0.1 million as of December 31, 2022. We completed the sale of 0.6 million shares of common stock and recognized a $0.5 million gain within “other expense, net” within the accompanying Consolidated Statements of Operations for the year ended December 31, 2022. Additionally, we completed the sale of our remaining 0.9 million shares of CASI Pharmaceuticals, Inc., a NASDAQ-listed biopharmaceutical company, and recognized a $1.9 million loss within “other expense, net” within the accompanying Consolidated Statements of Operations for the year ended December 31, 2022. We no longer hold any shares of CASI Pharmaceuticals, Inc. (b) Inventories Upon approval of ROLVEDON on September 9, 2022, we began capitalizing our purchases of saleable inventory of ROLVEDON from suppliers. Inventories consist of the following: December 31, 2022 2021 Raw materials $ 4,500 $ — Work-in-process 4,007 — Finished goods 723 — Inventories $ 9,230 $ — (c) Accounts Payable and Other Accrued Liabilities “Accounts payable and other accrued liabilities” consists of the following, with “Product revenue allowances – ROLVEDON” being as of and for the year ended December 31, 2022: December 31, 2022 2021 Trade accounts payable and other $ 30,547 $ 33,408 Lease liability - current portion 761 1,282 Product revenue allowances - ROLVEDON 3,082 — Commercial Product Portfolio accruals (Note 10) 3,715 6,568 Accounts payable and other accrued liabilities $ 38,105 $ 41,258 (1) (1) F-16 Notes to Consolidated Financial Statements (all tabular amounts presented in thousands, except share, per share, per unit, and number of years) Amounts presented within “accounts payable and other accrued liabilities” in the accompanying Consolidated Balance Sheets for our categories of gross-to-net (“GTN”) estimates related to discontinued operations (Commercial Product Portfolio) accruals were as follows: Commercial/Medicaid Rebates and Government Chargebacks Distribution, Data, Inventory, and GPO Administrative Fees Product Return Allowances Total Balance as of December 31, 2020 $ 2,601 $ 942 $ 4,299 $ 7,842 (Less): Payments and credits against GTN accruals (1,159) — (115) (1,274) Balance as of December 31, 2021 1,442 942 4,184 6,568 (Less): Payment and credits against GTN accruals (5) 93 (203) (115) (Less): Release of GTN accruals (117) (871) (1,750) (2,738) Balance as of December 31, 2022 $ 1,320 $ 164 $ 2,231 $ 3,715 NOTE 5. LOAN PAYABLE On September 21, 2022, we entered into the Loan Agreement that provides for a five-year senior secured term loan facility in an aggregate principal amount of up to $65.0 million, available to us in four tranches. Upon entering into the Loan Agreement in September 2022, we borrowed $30.0 million in term loans (the “Term A Loan”). As we did not satisfy the Term B Loan Funding Condition, we will be unable to draw the Term B Loan of $10.0 million (as those terms are defined in the Loan Agreement). As of December 31, 2022, we may borrow up to an additional $25.0 million in term loans subject to us achieving the following milestones: a. Through May 15, 2023, $15.0 million (the “Term C Loan”) if we provide satisfactory evidence that we have achieved a minimum of $15.7 million in Net Product Revenue (as defined in the Loan Agreement) calculated on a trailing six (6) month basis for any measuring period ending on or prior to March 31, 2023; and b. Through November 15, 2023, $10.0 million (the “Term D Loan”) if we provide satisfactory evidence that we have achieved a minimum of $40.0 million in Net Product Revenue calculated on a trailing six (6) month basis for any measuring period ending on or prior to September 30, 2023. The Loan Agreement contains customary events of default and representations, warranties and affirmative and negative covenants, including financial covenants requiring the Company to (i) maintain certain levels of cash in accounts subject to a control agreement in favor of the Agent of at least $25.0 million at all times commencing from September 21, 2022 and ending on the later of (A) July 31, 2023 and (B) the date Company either (1) receives, on or after September 13, 2022, at least $40.0 million in net cash proceeds from equity raises and/or business development or collaboration agreements or (2) (x) receives, on or after September 13, 2022, at least $30.0 million in net cash proceeds from equity raises and/or business development or collaboration agreements and (y) achieves at least $25.8 million in trailing 6-month net revenue from the sale of any products (on or prior to the period ending July 31, 2023) and (ii) maintain, commencing March 31, 2023, on a monthly basis until the end of 2023, and on a quarterly basis thereafter, either (A) net revenue from the sale of any products of at least $100 million on a trailing 12-month basis, or (B) net revenue from the sale of any products of an amount set forth in the Loan Agreement, on a trailing 6-month basis. The Term Loans are guaranteed by certain of our subsidiaries (the “Guarantors”). Our obligations under the Loan Agreement are secured by a pledge of substantially all of our assets and are secured by a pledge of substantially all of the assets of the Guarantors. The Term Loans bear interest at a floating rate per annum equal to the 1-Month CME Term SOFR (subject to a 2.3% floor) plus 5.7%. Interest-only payments are due beginning on November 1, 2022 through September 30, 2025, and the interest-only period may be extended to September 30, 2026 (“Principal Extension”) provided the Company and its subsidiaries have achieved a minimum of $40.0 million in net product revenue on a trailing six- month basis for any measuring period ending on or prior to September 30, 2023. We are also required to make monthly principal payments beginning on October 1, 2025 in an amount equal to 1/24th of the aggregate amount of the Term Loans outstanding if the Principal Extension is not executed, or, beginning on October 1, 2026, 1/12th of the aggregate amount of the Term Loans outstanding if the Principal Extension is executed. On the maturity date of September 1, 2027, we are required to pay in full all outstanding Term Loans and other amounts owed under the Loan Agreement. F-17 Notes to Consolidated Financial Statements (all tabular amounts presented in thousands, except share, per share, per unit, and number of years) At the time of borrowing any tranche of the Term Loans, we are required to pay an upfront fee of 1.0% of the aggregate principal amount borrowed at that time. We may prepay all of the Term Loans, and are required to make mandatory prepayments of the Term Loans upon the occurrence of a bankruptcy or insolvency event (including the acceleration of claims by operation of law). All mandatory and voluntary prepayments of the Term Loans are subject to prepayment premiums equal to (i) 3% of the principal prepaid if prepayment occurs on or before September 21, 2023, (ii) 2% of the principal prepaid if prepayment occurs after September 21, 2023 but on or before September 21, 2024, or (iii) 1% of the principal prepaid if prepayment occurs after September 21, 2024. We will pay facility fees and success fees upon borrowing the future tranches as follows: a. Facility fee of $0.2 million and success fee of 0.75% of the principal of the Term C Loans, and b. Facility fee of $0.1 million and success fee of 0.75% of the principal of the Term D Loans. In addition, we are required to pay an exit fee in an amount equal to 4.75% of all principal repaid, whether as a mandatory prepayment, voluntary prepayment, or a scheduled repayment. In connection with the Loan Agreement, we granted warrants (“Warrants”) to the Lenders to purchase up to 454,545 shares of our common stock at an exercise price of $0.66 per share, which had a fair market value at time of issuance of $0.2 million. The number of shares and exercise price are subject to anti-dilution adjustments for splits, dividends, capital reorganizations, reclassifications and similar transactions. Upon borrowing the future tranches, we will issue warrants to the Lenders to purchase an aggregate number of shares of common stock equal to 1.0% of the Term Loan amount funded divided by the applicable Exercise Price (as defined below). The Exercise Price is defined as the lesser of (a) the 10-day trailing average of the Company’s closing common stock price ending on the trading day immediately prior to the funding date of the applicable Term Loan and (b) the Company’s closing common stock price on the trading day immediately prior to the funding date of the applicable Term Loan. The Warrants are immediately exercisable, and the exercise period will expire 10 years from the date of issuance. During our evaluation of equity classification for the Warrants, we considered the conditions as prescribed within ASC 815-40, Derivatives and Hedging, Contracts in an Entity’s own Equity. The Warrants do not fall under the liability criteria within ASC 480, Distinguishing Liabilities from Equity as they are not puttable and do not represent an instrument that has a redeemable underlying security. The Warrants do meet the definition of a derivative instrument under ASC 815, but are eligible for the scope exception as they are indexed to our common stock and would be classified in permanent equity if freestanding. The Loan Agreement contains customary events of default that entitle SLR to accelerate the repayment of the Term Loans, and to exercise remedies against the Borrowers and the collateral securing the Term Loans. Upon the occurrence and for the duration of an event of default, an additional default interest rate of 4.0% will apply to all obligations owed under the Loan Agreement. In September 2022, we borrowed $30.0 million upon the signing of the Loan Agreement and incurred debt issuance costs of $3.0 million, including the exit fee of $1.4 million, that are classified as contra-liabilities on our consolidated balance sheets and are being recognized as interest expense over the term of the loan using the effective interest method. During the year ended December 31, 2022, we recognized interest expense related to the Term Loans of approximately $0.9 million, approximately $0.2 million of which was noncash expense. The following table summarizes the composition of Term Loans payable as reflected on the consolidated balance sheet as of December 31, 2022 (in thousands): December 31, 2022 Gross proceeds $ 30,000 Accrued exit fee 1,425 Unamortized debt discount (2,759) Carrying value $ 28,666 The aggregate maturities of Loan Payable as of December 31, 2022 are as follows (in thousands): F-18 Notes to Consolidated Financial Statements (all tabular amounts presented in thousands, except share, per share, per unit, and number of years) December 31, 2022 2023 $ — 2024 — 2025 3,750 2026 15,000 2027 and thereafter 11,250 $ 30,000 NOTE 6. STOCK-BASED COMPENSATION 2018 Long-Term Incentive Plan We have one active stockholder-approved stock-based compensation plan, the 2018 Long-Term Incentive Plan (the “2018 Plan”). In June 2018, the 2018 Plan replaced our former 2009 Incentive Award Plan (the “2009 Plan”). Under the 2018 Plan, we may grant restricted stock awards and units, incentive and nonqualified stock options, performance unit awards, stock appreciation rights, and other stock-based awards to employees, consultants, and members of our Board of Directors. On June 21, 2022, our shareholders approved an additional 18.0 million shares to be reserved for issuance under the 2018 Plan. Stock-based awards generally vest one-third on the first anniversary of the date of grant, and in equal annual installments thereafter over the remaining two years vesting period. Stock options must generally be exercised, if at all, no later than 10 years from the date of grant. In the event of a change in control, all award types with the exception of performance unit awards granted prior to January 2023, will vest in full effective immediately prior to the consummation of the change in control. All awards issued after January 2023, unless otherwise expressly defined in executive employment agreements, shall vest at the sole discretion of the compensation committee upon a change in control. For performance unit awards, if a change in control occurs prior to the end date and the participant remains employed prior to the change in control, the shares vest based on the achievement of the performance goals as of the date of which the change in control occurs. The stated maximum availability of common stock under the 2018 Plan is approximately 39 million shares, except for additional availability provided on a one-for-one basis for awards formerly issued under the 2009 Plan that are terminated, forfeited, cancelled or expire unexercised. Awards issued under the 2018 Plan reduce share availability on a one-to-one basis for stock options and on a 1.5-to-one basis for restricted stock awards and restricted stock units. Accordingly, as of December 31, 2022, 14.8 million awards were available for grant under the 2018 Plan, assuming all were issued in the form of stock options, but would be reduced to 9.9 million awards available for grant if all were issued in the form of restricted stock. It is our policy that before stock is issued through the exercise of stock options, we must first receive all required cash payment for such shares (whether through an upfront cash exercise or net-settlement exercise). At the time of vesting of restricted stock, by our policy, requisite shares are automatically sold on the open market by our designated broker to the extent required to cover the employee’s federal and state taxes due. Stock-based awards are governed by agreements between us and the recipients. Incentive stock options and nonqualified stock options may be granted under the 2018 Plan at an exercise price of not less than 100% of the fair market value of our common stock on the respective date of grant and for certain recipients may not be less than 110% of such fair market value. The grant date is generally the date the terms of the award are approved by the Compensation Committee of our Board of Directors (the “Compensation Committee”), or, in the case of certain awards, issued by the Chief Executive Officer to employees, pursuant to the authority granted to the CEO by the Compensation Committee. 2022 Employment Inducement Incentive Award Plan On October 19, 2022, the Board of Directors authorized the Company’s 2022 Employment Inducement Incentive Award Plan (the “Inducement Plan”), which authorizes the Company to issue up to 5,000,000 shares of common stock of the Company pursuant to Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Dividend Equivalent, and Other Stock Based Awards under the Inducement Plan (each term as defined in the Inducement Plan). The Inducement Plan is used exclusively for the grant of equity awards to individuals who were not previously employees of Spectrum, or following a bona F-19 Notes to Consolidated Financial Statements (all tabular amounts presented in thousands, except share, per share, per unit, and number of years) fide period of non-employment, as an inducement material to such individuals’ entering into employment with Spectrum, pursuant to Nasdaq Listing Rule 5635(c)(4). The Company has registered the Inducement Shares with the SEC pursuant to the Securities Act of 1933. As of December 31, 2022, 4.1 million shares remain available for issuance under the Inducement Plan. Employee Stock Purchase Plan Under the terms of our 2009 Employee Stock Purchase Plan (the “ESPP”), eligible employees can purchase common stock through scheduled payroll deductions. The purchase price is equal to the closing price of our common stock on the first or last day of the offering period (whichever is less), minus a 15% discount. We use the Black-Scholes option-pricing model, in combination with the discounted employee price, in determining the value of ESPP expense to be recognized during each offering period. A participant may purchase a maximum of 50,000 shares of common stock during a six-month offering period, not to exceed $25,000 at full market value on the offering date during each plan year. As of December 31, 2022, a total of 7.5 million shares of common stock are authorized and remain available for issuance under the ESPP. Beginning on January 1, 2010, and each January 1st thereafter, the number of shares of common stock available for issuance under the ESPP shall automatically increase by an amount equal to the lesser of (i) one million shares or (ii) an amount determined by the ESPP administrator. However, in no event shall the number of shares of common stock available for future sale under the ESPP exceed 10 million shares, subject to capitalization adjustments occurring due to dividends, splits, dissolution, liquidation, mergers, or changes in control. Stock-Based Compensation Expense Summary We report our stock-based compensation expense (inclusive of our incentive stock plan and employee stock purchase plan) in the accompanying Consolidated Statements of Operations within “total operating costs and expenses” for the years ended December 31, 2022 and 2021, as follows: Year Ended December 31, 2022 2021 Selling, general and administrative $ 6,058 $ 14,644 Research and development 2,432 5,197 Total stock-based compensation $ 8,490 $ 19,841 Employee stock-based compensation expense for the years ended December 31, 2022 and 2021 was recognized (reduced for estimated forfeitures) on a straight-line basis over the vesting period. Forfeitures are estimated at the time of grant and are prospectively revised if actual forfeitures differ from those estimates. We estimate forfeitures of stock options using the historical exercise behavior of our employees. For purposes of this estimate, we have applied an estimated forfeiture rate of 10% and 11% for the years ended December 31, 2022 and 2021, respectively. Valuation Assumptions The grant-date fair value per share for restricted stock awards was based upon the closing market price of our common stock on the award grant-date. The fair value of stock options granted was estimated at the date of grant using the Black-Scholes option-pricing model. The following assumptions were used to determine fair value for the stock awards granted in the applicable year: Year Ended December 31, 2022 2021 Expected option life (in years) 4.42 5.57 Risk-free interest rate 1.70% - 4.42% 0.56% - 1.32% Volatility 83.6% - 90.5% 80.0% - 82.7% Dividend yield 0% 0% Weighted-average grant-date fair value per stock option $0.40 $1.78 Determined by the historical stock option exercise behavior of our employees (maximum term is 10 years). Based upon the U.S. Treasury yields in effect during the period which the options were granted (for a period equaling the stock options’ expected term). (a) (b) (c) (d) (a) (b) F-20 Notes to Consolidated Financial Statements (all tabular amounts presented in thousands, except share, per share, per unit, and number of years) Measured using our historical stock price for a period equal to stock options’ expected term. We do not expect to declare any cash dividends in the foreseeable future. Stock Option Activity Stock option activity during the years ended December 31, 2022 and 2021 was as follows: Number of Shares Weighted- Average Exercise Price/Share Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding — December 31, 2020 7,656,623 $ 7.80 Granted 2,397,684 2.66 Exercised (1,250) 3.04 $ 1.5 (1) Forfeited (34,565) 10.05 Expired (513,031) 9.29 Outstanding — December 31, 2021 9,505,461 $ 6.42 Granted 6,885,316 0.68 Exercised — — $ — (1) Forfeited (1,230,311) 1.22 Expired (1,683,843) 7.65 Outstanding — December 31, 2022 13,476,623 $ 3.81 6.80 $ — (2) Expected to Vest at December 31, 2022 6,090,775 $ 1.10 9.03 $ — (2) Vested and Exercisable at December 31, 2022 6,594,608 $ 6.64 4.45 $ — (2) (1) Represents the total difference between our closing stock price at the time of exercise and the stock option exercise price, multiplied by the number of options exercised. (2) Represents the total difference between our closing stock price on the last trading day of 2022 and the stock option exercise price, multiplied by the number of in-the-money options as of December 31, 2022. The amount of intrinsic value will change based on the fair market value of our stock. The following table summarizes information with respect to stock option grants as of December 31, 2022: Outstanding Exercisable Exercise Price Granted Stock Options Outstanding Weighted- Average Remaining Contractual Life (Years) Weighted- Average Exercise Price Granted Stock Options Exercisable Weighted- Average Exercise Price $0.63 - 4.96 9,809,291 7.99 $ 1.41 2,955,694 $ 2.23 $4.97 - 6.91 1,317,760 3.23 5.97 1,317,760 5.97 $6.92 - 9.00 855,991 2.19 7.74 855,991 7.74 $9.01 - 12.00 650,723 5.14 11.17 622,305 11.19 $12.01 - 22.64 842,858 4.44 18.66 842,858 18.66 13,476,623 6.80 $ 3.81 6,594,608 $ 6.64 For the years ended December 31, 2022 and 2021, we recorded stock-based compensation expense of $2.6 million and $4.5 million, respectively, related to issued stock options. As of December 31, 2022, there was unrecognized compensation expense of $3.6 million related to unvested stock options, which we expect to recognize over a weighted average period of 1.9 years. Restricted Stock Award Activity (c) (d) F-21 Notes to Consolidated Financial Statements (all tabular amounts presented in thousands, except share, per share, per unit, and number of years) A summary of restricted stock award activity is as follows: Number of Restricted Stock Awards Weighted Average Fair Value per Share at Grant Date Unvested — December 31, 2020 4,496,045 $ 4.29 Granted 2,820,259 3.33 Vested (2,272,064) 5.06 Forfeited (608,233) 3.85 Unvested — December 31, 2021 4,436,007 3.33 Granted 2,160,240 1.20 Vested (2,025,140) 3.40 Forfeited (1,756,002) 2.23 Unvested — December 31, 2022 2,815,105 $ 2.11 For the years ended December 31, 2022 and 2021, we recorded stock-based compensation expense on our issued restricted share awards of $4.6 million and $9.6 million, respectively. As of December 31, 2022, there was approximately $3.4 million of unrecorded expense that will be recognized over an estimated weighted average period of 1.6 years. These unvested shares are included in our reported issued and outstanding common stock as of December 31, 2022. Restricted Stock Unit Activity A summary of restricted stock unit activity is as follows: Number of Restricted Stock Units Weighted Average Fair Value per Share at Grant Date Outstanding — December 31, 2020 263,524 $ 26.39 Granted 2,125 3.61 Market-based achievement adjustment at vesting 75,000 — Share issuance (151,386) 28.09 Forfeited (4,751) 4.03 Outstanding — December 31, 2021 184,512 23.53 Granted 2,665,602 0.59 Share issuance (135,013) 0.37 Forfeited (274,539) 0.63 Outstanding — December 31, 2022 2,440,562 $ 0.63 For the years ended December 31, 2022 and 2021, we recorded stock-based compensation expense on our issued restricted stock units of $0.3 million and $1.1 million, respectively. As of December 31, 2022, there was $1.2 million of unrecorded expense that will be recognized over an estimated weighted average period of 2.4 years. Stock Appreciation Rights During the year ended December 31, 2022, no stock appreciation rights (“SARs”) were granted to our Named Executive Officers. During the year ended December 31, 2021, we granted 2.1 million SARs to our Named Executive Officers. On the date of grant, the fair value of these SARs were estimated using the Black-Scholes option-pricing model and 25% immediately vested. There were 0.7 million forfeitures or cancellations during the year ended December 31, 2022. We recognized stock-based compensation expense of $0.6 million and $4.2 million, respectively, within our Consolidated Statements of Operations for the years ended December 31, 2022 and 2021. As of December 31, 2022, there was approximately $0.3 million of unrecorded expense that will be recognized over an estimated weighted average period of 1.1 years. NOTE 7. STOCKHOLDERS’ EQUITY F-22 Notes to Consolidated Financial Statements (all tabular amounts presented in thousands, except share, per share, per unit, and number of years) Sale of Common Stock Under ATM Agreements On April 5, 2019, we entered into a new collective at-market-issuance (“ATM”) sales agreement with Cantor Fitzgerald & Co., H.C. Wainwright & Co., LLC and B. Riley FBR, Inc. (the “April 2019 ATM Agreement”), pursuant to which we may offer and sell shares of our common stock by any method deemed to be an “at the market” offering (the “ATM Offering”). From April 5, 2019 to March 2, 2020, the ATM Offering was conducted pursuant to a sales agreement prospectus filed with our automatic shelf registration statement on Form S-3ASR, filed with the SEC on April 5, 2019, which registered an aggregate offering price of $150 million under the April 2019 ATM Agreement. From May 8, 2020 to June 30, 2020, the ATM Offering was conducted pursuant to a sales agreement prospectus (the “Initial Sales Agreement Prospectus”) filed with our shelf registration statement on Form S-3, filed with the SEC on March 20, 2020, as amended by Pre-Effective Amendment No. 1 thereto, and declared effective by the SEC on May 8, 2020 (the “Registration Statement”), which registered an aggregate offering price of up to $75 million under the April 2019 ATM Agreement. On July 29, 2020, we terminated the Initial Sales Agreement Prospectus, but left the April 2019 ATM Agreement in full force and effect. On November 6, 2020, we filed a new sales agreement prospectus to the Registration Statement, which registered an aggregate offering price of up to $60 million under the April 2019 ATM Agreement. On July 13, 2021, we filed a shelf registration statement with the SEC on Form S-3, which was declared effective by the SEC on July 21, 2021 (the “Registration Statement”). The Registration Statement registered an aggregate offering price of up to $300 million of securities that may be issued and sold by us from time to time, including up to an aggregate offering price of $150 million of common stock (which amount is included in the $300 million aggregate offering price set forth in the base prospectus) that may be issued and sold pursuant to the April 2019 ATM Agreement. The Registration Statement is effective until July 2024. As of December 31, 2022, there was approximately $128.8 million remaining to be sold pursuant to the April 2019 ATM Agreement, subject to the availability of authorized shares. We sold and issued common shares under the April 2019 ATM Agreement as follows: Description of Financing Transaction No. of Common Shares Issued Proceeds Received (Net of Broker Commissions and Fees ) Common shares issued pursuant to the April 2019 ATM Agreement during the year ended December 31, 2021 15,851,391 $ 52,621 Common shares issued pursuant to the April 2019 ATM Agreement during the year ended December 31, 2022 24,513,945 $ 26,561 These proceeds and any future proceeds raised will support the advancement of our in-development drug candidates, activities in connection with the launch of these drugs (including the hiring of personnel, building inventory supply and equipment purchases), completing acquisitions of assets, businesses, or securities, and for all other working capital purposes. Investment from Hanmi During January 2022, we entered into a Securities Purchase Agreement with Hanmi, pursuant to which Hanmi purchased 12,500,000 shares of our common shares at a purchase price of $1.60 per share, for an aggregate purchase price equal to $20 million, making them a related party. NOTE 8. FINANCIAL COMMITMENTS & CONTINGENCIES AND KEY LICENSE AGREEMENTS (a) Facility and Equipment Leases Overview In the ordinary course of our business, we enter into leases with unaffiliated parties for the use of (i) office and research facilities and (ii) office equipment. Our current leases have remaining terms ranging from two to four years and none include any residual value guarantees, restrictive covenants, term extensions, or early-termination options. We lease our principal executive office in Boston, Massachusetts under a non-cancelable operating lease expiring December 31, 2024. We also lease our administrative office in Irvine, California under a non-cancelable operating lease expiring July 31, 2025. We also leased an office facility in Henderson, Nevada under a non-cancelable operating lease which expired on October 31, 2022. F-23 Notes to Consolidated Financial Statements (all tabular amounts presented in thousands, except share, per share, per unit, and number of years) Our facility leases have minimum annual rents, payable monthly, and some carry fixed annual rent increases. Under some of these arrangements, real estate taxes, insurance, certain operating expenses, and common area maintenance are reimbursable to the lessor. These amounts are expensed as incurred, as they are variable in nature and therefore excluded from the measurement of our reported lease asset and liability discussed below. As of December 31, 2022 and 2021, we had no sublease arrangements with us as lessor, and no finance leases, as defined in ASU 2016-02, Leases (“Topic 842”). The reported asset and liability, respectively, represents (i) the economic benefit of our use of leased facilities and equipment and (ii) the present- value of our contractual minimum lease payments, applying our estimated incremental borrowing rate as of the lease commencement date (since an implicit interest rate is not readily determinable in any of our leases). The recorded asset and liability associated with each lease is amortized over the respective lease term using the effective interest rate method. During the year ended December 31, 2022 and 2021, we recognized $0.4 million and $1.8 million, respectively, of additional right-of-use assets in exchange for lease liabilities. We elected to not separate “lease components” from “non-lease components” in our measurement of minimum payments for our facility leases and office equipment leases. Additionally, we elected to not recognize a lease asset and liability for a term of 12 months or less. Financial Reporting Captions The below table summarizes the lease asset and liability accounts presented on our accompanying Consolidated Balance Sheets: Operating Leases Consolidated Balance Sheet Caption December 31, 2022 December 31, 2021 Operating lease right-of-use assets - non-current Facility and equipment under lease $ 1,694 $ 2,505 Operating lease liabilities - current Accounts payable and other accrued liabilities $ 761 $ 1,282 Operating lease liabilities - non-current Other long-term liabilities 1,056 1,452 Total operating lease liabilities $ 1,817 $ 2,734 As of December 31, 2022 and 2021, our “facility and equipment under lease” consisted of office and research facilities of $1.4 million and $2.1 million, respectively, and office equipment of $0.3 million and $0.4 million, respectively. Components of Lease Expense We recognize lease expense on a straight-line basis over the term of our operating leases, as reported within “selling, general and administrative” expense on the accompanying Consolidated Statements of Operations. The components of our aggregate lease expense is summarized below: Year Ended December 31, 2022 Year Ended December 31, 2021 Operating lease cost $ 1,298 $ 1,711 Variable lease cost 242 378 Short-term lease cost 47 63 Total lease cost $ 1,587 $ 2,152 Weighted Average Remaining Lease Term and Applied Discount Rate Weighted Average Remaining Lease Term Weighted Average Discount Rate Operating leases as of December 31, 2022 2.5 years 3.0% Operating leases as of December 31, 2021 2.7 years 3.8% Future Contractual Lease Payments F-24 Notes to Consolidated Financial Statements (all tabular amounts presented in thousands, except share, per share, per unit, and number of years) The below table summarizes our (i) minimum lease payments over the next five years, (ii) lease arrangement implied interest, and (iii) present value of future lease payments: Operating Leases - future payments December 31, 2022 2023 $ 804 2024 821 2025 188 2026 73 2027 — Total future lease payments, undiscounted $ 1,886 (Less): Implied interest (69) Present value of operating lease payments $ 1,817 (b) In/Out Licensing Agreements and Co-Development Arrangements Overview The in-license agreements for our development-stage drug products provide us with territory-specific rights to their manufacture and distribution (including further sub-licensing/out-licensing rights). We are generally responsible for all related clinical development costs, patent filings and maintenance costs, marketing costs, and liability insurance costs. We also may enter into out-license agreements for territory-specific rights to these drug products which include one or more of: upfront license fees, royalties from our licensees’ sales, and/or milestone payments from our licensees’ sales or regulatory achievements. For certain drug products, we may enter into cost-sharing arrangements with licensees and licensors. We are also obligated to make specified milestone payments to our licensors upon the achievement of certain regulatory and sales milestones, and to pay royalties based on our net sales of all in-licensed products. Depending on the milestone achievement type and whether the product has been approved, we will either (a) capitalize the value to “intangible assets” in the Consolidated Balance Sheets or (b) recognize the payment value within “research and development” or “cost of sales” on the Consolidated Statements of Operations. The liability relating to the payment due to the licensor will be recognized in the earliest period that we determine the respective milestone achievement is probable or has occurred. The most significant remaining agreements associated with our operations, along with the key financial terms and our corresponding accounting and reporting conventions for each, are as follows: (i) ROLVEDON: Co-Development and Commercialization Agreement with Hanmi In October 2014, we exercised our option under a License Option and Research Collaboration Agreement dated January 2012 (as amended) with Hanmi, which became a related party in January 2022 (see note 7), for ROLVEDON, a drug based on Hanmi’s proprietary LAPSCOVERY™ technology for the treatment of chemotherapy induced neutropenia. Under the terms of this agreement, as amended, we have primary financial responsibility for the ROLVEDON development plan and hold its worldwide rights (except for Korea, China, and Japan). Effective January 1, 2022, we executed an amendment to this license agreement, whereby we are contractually obligated to pay Hanmi a flat mid- single digit royalty on our aggregate annual net sales of ROLVEDON. Additionally, Hanmi has agreed to release the Company from a prior purchase obligation for ROLVEDON drug substance which resulted in a reduction in accrued liabilities of $11.2 million with a corresponding reduction in research and development expense. In addition, beginning in year three after the commercial launch, we are responsible for a supplemental mid-single digit royalty on aggregate annual net sales. This supplemental royalty will terminate once the aggregate payments made to Hanmi meet the milestone limit of $10 million, based on the supplemental royalty. During the year ended December 31, 2022, we incurred $0.4 million in expenses with Hanmi, which are included as components of cost of sales and selling, general and administrative expenses in the consolidated statements of operations. We also purchased $9.0 million in inventory from Hanmi during the year ended December 31, 2022. As of December 31, 2022, we owed Hanmi $9.8 million, which is included as a component of accounts payable and other accrued liabilities on our consolidated balance sheet. (ii) Poziotinib: In-License Agreement with Hanmi and Exclusive Patent and Technology License Agreement with MD Anderson In February 2015, we executed an in-license agreement with Hanmi for poziotinib, a pan-HER inhibitor in Phase 2 clinical trials, (which has also shown single agent activity in the treatment of various cancer types during Phase 1 studies, F-25 Notes to Consolidated Financial Statements (all tabular amounts presented in thousands, except share, per share, per unit, and number of years) including breast, gastric, colorectal, and lung cancers) and made an upfront payment to Hanmi for these distribution rights. Under the terms of this agreement, we received the exclusive global rights to commercialize poziotinib, except for Korea and China. Hanmi and its development partners are fully responsible for the completion of on-going Phase 2 trials in Korea. We are financially responsible for all other clinical studies. Effective January 1, 2022, we executed an amendment to this in-license agreement, whereby the payments to Hanmi upon our achievement of various regulatory milestones now aggregate to $18 million, which includes eliminating the first approval milestone payment in return for a supplemental mid- single digit royalty on aggregate annual net sales beginning in year three after the commercial launch. This supplemental royalty will terminate once the aggregate payments made to Hanmi meet the milestone limit of $15 million, based on the supplemental royalty. There were no contractual obligations to Hanmi for the year ended December 31, 2022. In April 2018, we executed an exclusive patent and technology agreement for the use of poziotinib in treating patients with EGFR and HER2 exon 20 mutations in cancer and HER2 exon 19 mutations in cancer with The University of Texas M.D. Anderson Cancer Center (“MD Anderson”). MD Anderson discovered poziotinib’s use in treating these patient-types. We made an upfront payment to MD Anderson of $0.5 million upon the execution of this agreement. We are contractually obligated to pay nominal fixed annual license maintenance fees to MD Anderson and pay additional fees upon our achievement of various regulatory and sales milestones. These regulatory milestones aggregate $6 million and the sales milestones aggregate $24 million. We are also contractually obligated to pay MD Anderson royalties in the low single-digits on our net sales of poziotinib. (iii) In-License Agreement with ImmunGene for FIT Drug Delivery Platform In April 2019, we executed an asset transfer, license, and sublicense agreement with ImmunGene, Inc. (“ImmunGene”) for an exclusive license for the intellectual property related to (a) Anti-CD20-IFNα, an antibody-interferon fusion molecule directed against CD20 that is in Phase 1 development for treating relapsed or refractory non-Hodgkin’s lymphoma, including diffuse large B-cell lymphoma patients, representing a considerable unmet medical need, and (b) an antibody-interferon fusion molecule directed against GRP94, a target for which currently there are no existing approved therapies that have the potential for treating both solid and hematologic malignancies. Both molecules are based on the Focused Interferon Therapeutics (“FIT”) drug delivery platform. In November 2021, we provided notice to terminate the asset transfer, license, and sublicense agreement with ImmunGene, Inc. Pursuant to the agreement, we will transfer the rights, title or interest with respect to the transferred product back to ImmunGene. There were no contractual obligations to ImmunGene for the twelve months ended December 31, 2022. As of December 31, 2022 we are no longer prosecuting or maintaining any ImmunGene intellectual property and we are not contractually obligated to pay nominal fixed annual license maintenance fees to any ImmunGene-related licensor. (iv) In-License Agreement with Therapyx In December 2020, we executed an asset transfer and license agreement with Therapyx, Inc. (“Therapyx”) for an exclusive worldwide license for the intellectual property related to any pharmaceutical or biological product for use in human oncology containing, whether as its sole active or in combination with other active ingredients, an encapsulated IL-12, in any injectable dosage form or formulation. We made an upfront payment of $0.8 million to Therapyx upon contract execution, which was recorded to “research and development” expense within our Consolidated Statements of Operations for the year ended December 31, 2020. We will make an additional payment of $2.2 million upon our acceptance of certain transferred materials from Therapyx. We will make further payments to Therapyx upon our achievement of various (i) regulatory milestones aggregating up to $30 million for the first approved IL-12 product, plus an additional $2.5 million milestone payment for each new indication approved for each product in the U.S., Europe, or Japan; and (ii) sales milestones aggregating up to $167.5 million based on worldwide annual net sales. We are contractually obligated to pay royalties in the mid-single digits on our net sales of all IL-12 products, potentially reduced by royalties due to third parties, the loss of IP protection within one or more countries, or the introduction of a competing product within one or more countries. Depending on the nature of the milestone achievement type we will either (a) capitalize the payment value to “intangible assets” in the Consolidated Balance Sheets or (b) recognize the payment value within “research and development” or “cost of sales” within the Consolidated Statements of Operations. The corresponding liability for the payment due to this licensor will be recognized in the Consolidated Balance Sheets within “accounts payable and other accrued liabilities” in the earliest period that we determine the respective milestone achievement is probable or has occurred. F-26 Notes to Consolidated Financial Statements (all tabular amounts presented in thousands, except share, per share, per unit, and number of years) (c) Service Agreements for Research and Development Activities We have entered into various contracts with numerous third-party service providers for the execution of our research and development initiatives. These vendors include raw material suppliers, clinical trial sites, clinical research organizations, and data monitoring centers, among others. The financial terms of these agreements are varied and generally obligate us to pay in stages, depending on the achievement of certain events specified in the agreements - such as contract execution, progress of service completion, delivery of drug supply, and the dosing of patients in clinical studies. We recognize these “research and development” expenses and corresponding “accounts payable and other accrued liabilities” in the accompanying financial statements based on estimates of our vendors’ progress of performed services, patient enrollments and dosing, completion of clinical studies, and other events. Should we decide to discontinue and/or slow-down the work on any project, the associated costs for those projects would typically be limited to the extent of the work completed, as we are generally able to terminate these contracts with adequate notice. (d) Supply and Service Agreements Associated with Product Production We have various product supply agreements and/or have issued vendor purchase orders that obligate us to agreed-upon raw material purchases from certain vendors. We also have certain drug production service agreements with select contract manufacturers that obligate us to service fees during the contractual period. (e) Employment Agreements We entered into revised employment agreements with certain of our named executive officers (chief executive officer and chief legal officer) in April/June 2018, which supersede any prior change in control severance agreements with such individuals. We entered into an employment agreement with our chief financial officer in April 2022. These agreements provide for the payment of certain benefits to each executive upon their separation of employment under specified circumstances. These arrangements are designed to encourage each to act in the best interests of our stockholders at all times during the course of a change in control event or other significant transaction. We previously entered into an employment agreement with our former Chief Executive Officer, Joseph Turgeon, under which cash compensation and benefits would become payable in the event of termination by us for any reason other than cause, his resignation for good reason, or upon a change in control of our Company. Effective December 31, 2021, Mr. Turgeon’s employment with the Company was terminated without cause in accordance with his employment agreement. We accrued $3.1 million for all contractual amounts due and unpaid to Mr. Turgeon as of December 31, 2021, within "accrued payroll and benefits" on the accompanying Consolidated Balance Sheets. The amount was paid in its entirety in 2022. (f) Deferred Compensation Plan The Spectrum Pharmaceuticals, Inc. Deferred Compensation Plan (the “DC Plan”) is administered by the Compensation Committee of our Board of Directors and is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended. The DC Plan is maintained to provide special deferred benefits for a select group of our employees (the “DC Participants”). DC Participants make annual elections to defer a portion of their eligible cash compensation which is then placed into their DC Plan accounts. We matched a fixed percentage of these deferrals and may make additional discretionary contributions. At December 31, 2022 and 2021, the aggregate value of this DC Plan liability was $4.5 million and $11.2 million, respectively, and is included within “accounts payable and other accrued liabilities” and “other long-term liabilities” in the accompanying Consolidated Balance Sheets. (g) Litigation We are involved from time-to-time with various legal matters arising in the ordinary course of business. These claims and legal proceedings are of a nature we believe are normal and incidental to a pharmaceutical business, and may include product liability, intellectual property, employment matters, and other general claims. We may also be subject to derivative lawsuits from time to time. We make provisions for liabilities when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Such provisions are assessed at least quarterly and adjusted to reflect the impact of any settlement negotiations, judicial and administrative rulings, advice of legal counsel, and other information and events pertaining to a particular case. Litigation is inherently unpredictable. Although the ultimate resolution of these various matters cannot be F-27 Notes to Consolidated Financial Statements (all tabular amounts presented in thousands, except share, per share, per unit, and number of years) determined at this time, we do not believe that such matters, individually or in the aggregate, will have a material adverse effect on our consolidated results of operations, cash flows, or financial condition. Stockholder Actions Luo v. Spectrum Pharmaceuticals, Inc., et al., U.S. District Court, District of Nevada, Case No. 2:21-cv-01612. On August 31, 2021, this putative securities class action lawsuit was filed by a purported shareholder, alleging that we and certain of our current and former executive officers and directors made false or misleading statements and failed to disclose material facts about our business and the prospects of approval for our BLA to the FDA for eflapegrastim (ROLVEDON) in violation of Section 10(b) (and Rule 10b-5 promulgated thereunder) and 20(a) of the Securities Exchange Act of 1934. On November 1, 2021, four individuals and one entity filed competing motions to be appointed lead plaintiff and for approval of counsel. On July 28, 2022, the Court appointed a lead plaintiff and counsel for the putative class. On September 26, 2022, an amended complaint was filed alleging, inter alia, false and misleading statements with respect to ROLVEDON manufacturing operations and controls and added allegations that defendants misled investors about the efficacy of, clinical trial data and market need for Poziotinib between a Class Period of March 7, 2018 and August 5, 2021. The amended complaint seeks damages, interest, costs, attorneys’ fees, and such other relief as determined by the Court. On November 30, 2022, we filed a motion to dismiss the amended complaint, which motion is pending. There is no hearing date presently scheduled. Three additional related putative securities class action lawsuits were subsequently filed by shareholders against us in the U.S. District Court for the Southern District of New York: Osorio-Franco v. Spectrum Pharmaceuticals, Inc., et al., Case No. 1:22-cv-10292 (filed December 5, 2022); Cummings v. Spectrum Pharmaceuticals, Inc., et al., Case No. 1:22-cv- 10677 (filed December 19, 2022); and Carneiro v. Spectrum Pharmaceuticals, Inc., et al., Case No. 1:23-cv-00767 (filed January 30, 2023). These three New York lawsuits allege that we and certain of our executive officers and directors made false or misleading statements about, inter alia, the safety and efficacy of and clinical trial data for Poziotinib in violation of Section 10(b) (and Rule 10b-5 promulgated thereunder) and 20(a) of the Securities Exchange Act of 1934, and seek remedies including damages, interest, costs, attorneys’ fees, and such other relief as determined by the Court. The Osorio-Franco and Cummings lawsuits allege Class Periods between December 6, 2021 and September 22, 2022. The Carneiro lawsuit alleges a Class Period between July 27, 2020 and September 22, 2022, which overlaps with the Luo action Class Period. On February 15, 2023, the Court consolidated the three New York lawsuits, with Osorio-Franco as the lead case. We believe that all of the putative securities class action lawsuit claims are without merit and intend to vigorously defend against these claims. Csaba v. Turgeon, et. al, (filed December 15, 2021 in the U.S. District Court District of Nevada); Shumacher v. Turgeon, et. al, (filed March 15, 2022 in the U.S. District Court District of Nevada); Johnson v. Turgeon, et. al, (filed March 29, 2022 in the U.S. District Court District of Nevada); Raul v. Turgeon, et. al, (filed April 28, 2022 in the U.S. District Court District of Delaware); and Albayrak v. Turgeon, et al, (filed June 9, 2022 in the U.S. District Court District of Nevada). These putative stockholder derivative actions were filed against us (as a nominal defendant), certain of our executive officers, and certain of our past and present members of the board of directors. The stockholder derivative complaints allege, inter alia, that certain of our executive officers are liable to Spectrum, pursuant to Section 10(b) and 21D of the Securities Exchange Act of 1934, as amended, for contribution and indemnification, if they are deemed (in the Luo class action), to have made false or misleading statements and failed to disclose material facts about our business and the prospects of approval for our BLA to the FDA for eflapegrastim. The complaints generally but not uniformly further allege that certain of our executive officers and certain of our past and present directors breached their fiduciary duties, and certain of our present directors negligently violated Section 14(a) of the Exchange Act, by allegedly causing such false or misleading statements to be issued and/or failing to disclose material facts about our business and the prospects of approval for our BLA to the FDA for eflapegrastim. The allegations state that as a result of the violations, certain of our executive officers and past and present board members committed acts of gross mismanagement, abuse of control, or were unjustly enriched. The plaintiffs generally seek corporate reforms, damages, interest, costs, attorneys’ fees, and other unspecified equitable relief. The parties have agreed to stay all derivative actions until there is an adverse decision on a motion to dismiss in the Luo Nevada securities class action. We believe that the derivative actions are without merit and intend to vigorously defend against these claims. NOTE 9. INCOME TAXES F-28 Notes to Consolidated Financial Statements (all tabular amounts presented in thousands, except share, per share, per unit, and number of years) The components of loss before benefit for income taxes from continuing operations are as follows: Year Ended December 31, 2022 2021 United States $ (78,126) $ (158,552) Foreign 68 120 Total $ (78,058) $ (158,432) The provision for income taxes from continuing operations consist of the following: Year Ended December 31, 2022 2021 Current: Federal $ — $ — State — — Foreign 46 4 $ 46 $ 4 Deferred: Federal — — State — — Foreign — — — — Total income tax expense $ 46 $ 4 For the fiscal year ended December 31, 2022, we generated losses from continuing operations and recognized $46 thousand of tax expense from our foreign continuing operations. The income tax expense differs from that computed using the applicable federal statutory rate, as applied to our income before taxes in each year as follows: Year Ended December 31, 2022 2021 Tax provision computed at the federal statutory rate $ (16,392) $ (33,210) State tax, net of federal benefit (2,913) (11,050) Research and development expense tax credits (328) (1,838) Officers compensation (738) 1,988 Stock based compensation 2,688 1,234 Permanent items and other 157 (173) Change in tax rate 3,288 (6,671) Change in prior year deferred taxes 568 (353) Valuation allowance 13,716 50,077 Income tax expense $ 46 $ 4 Significant components of our deferred tax assets and liabilities as of December 31, 2022 and 2021 are presented below. A valuation allowance has been recognized to offset the net deferred tax assets as realization of such deferred tax assets did not F-29 Notes to Consolidated Financial Statements (all tabular amounts presented in thousands, except share, per share, per unit, and number of years) meet our “more-likely-than-not” assessment threshold, as required under GAAP. December 31, 2022 2021 Deferred tax assets: Net operating loss carry forwards $ 198,162 $ 187,129 Research and development expense tax credits 27,669 27,341 Stock based compensation 4,136 5,470 Lease obligation 456 783 ROLVEDON supplies 9,337 — Returns and allowances 636 1,198 Amortization differences 857 1,749 Capitalized research and development expenses 12,218 — Other, net 3,114 20,610 Total deferred tax assets before valuation allowance 256,585 244,280 Valuation allowance (256,063) (242,590) Total deferred tax assets 522 1,690 Deferred tax liabilities, net: Unrealized gains (97) (973) Right-of-use asset (425) (717) Net deferred tax liabilities $ — $ — At December 31, 2022 and 2021, we recorded a valuation allowance of $256.1 million and $242.6 million, respectively. The valuation allowance increased by $13.5 million and $50.1 million during 2022 and 2021, respectively. The increases in the valuation allowance in 2022 and 2021 were mostly due to an increase in net operating loss carryforwards. The $13.5 million increase in valuation allowance in 2022 is comprised of a $13.7 million increase from losses in continuing operations net of a $0.2 million decrease from income in discontinued operations. At December 31, 2022, we had federal and state net operating loss carryforwards of approximately $789.3 million and $603.4 million, respectively. We have approximately $0.5 million of foreign loss carryforwards that will begin to expire in 2039. The federal and state loss carry forwards began expiring in 2022 unless previously utilized. Federal loss carryforwards generated in 2018 and beyond of $510.7 million will be carried forward indefinitely. At December 31, 2022, we had federal and state tax credits of approximately $19.0 million and $11.0 million, respectively. The federal tax credit carryovers begin to expire in 2027 unless previously utilized. The state credit carryforwards have an indefinite carryover period. Our utilization of certain net operating loss and research and development expense tax credit carryforwards, including those acquired in connection with the acquisition of Allos Therapeutics, Inc. in April 2012 and Talon Therapeutics, Inc. in July 2013, are subject to annual limitations under Sections 382 and 383 of the Internal Revenue Code of 1986 and similar state provisions. Any net operating losses or credits that would expire unutilized as a result of Section 382 and 383 limitations have been removed from the table of deferred tax assets and the accompanying disclosures of net operating loss and research and development carryforwards. The following tabular reconciliation summarizes the activity related to our unrecognized tax benefits: Year Ended December 31, 2022 2021 Balance at beginning of year $ 3,524 $ 3,336 Adjustments related to prior year tax positions — (318) Increases related to current year tax positions 102 506 Balance at end of year $ 3,626 $ 3,524 We continue to believe that our tax positions meet the “more-likely-than-not” standard and as part of that analysis, we considered the amounts and probabilities from ultimate settlement with the tax authorities. F-30 Notes to Consolidated Financial Statements (all tabular amounts presented in thousands, except share, per share, per unit, and number of years) Approximately $0.1 million and $0.1 million of the total unrecognized tax benefits as of December 31, 2022 and 2021, respectively, would reduce our annual effective tax rate if recognized. Additional amounts in the summary rollforward could impact our effective tax rate if we did not maintain a full valuation allowance on our net deferred tax assets. We do not expect our unrecognized tax benefits to change significantly over the next 12 months. With a few exceptions, we are no longer subject to U.S. federal, state and local income tax examinations for years before 2018. In addition, the utilization of net loss carryforwards is subject to federal and state adjustment for the periods in which those net losses were incurred. Our policy is to recognize interest and/or penalties related to unrecognized tax benefits in income tax expense in the Consolidated Statements of Operations. NOTE 10. DISCONTINUED OPERATIONS Overview In March 2019 we completed the sale of our seven then-commercialized drugs (the “Commercial Product Portfolio”) to Acrotech in the Commercial Product Portfolio Transaction. Upon closing we received $158.8 million in an upfront cash payment. We are also entitled to receive up to an aggregate of $140 million upon Acrotech’s future achievement of certain regulatory milestones (totaling $40 million) and sales-based milestones (totaling $100 million) relating to the Commercial Product Portfolio. Substantially all of the contractual rights and obligations associated with the Commercial Product Portfolio were transferred to Acrotech at the closing of the Commercial Product Portfolio Transaction. However, under the terms of this transaction we retained our trade “accounts receivable, net” and GTN liabilities included within “accounts payable and other accrued liabilities” associated with our product sales made on and prior to February 28, 2019. Accordingly, these Consolidated Financial Statements reflect the corresponding revenue-deriving activities and allocable expenses of this commercial business within “discontinued operations”. Consolidated Statements of Operations The following table presents the various elements of “income (loss) from discontinued operations, net of income taxes” as reported in the accompanying Consolidated Statements of Operations: Year ended December 31, 2022 2021 Revenues: Product sales, net $ 2,739 $ — Total revenues $ 2,739 $ — Operating costs and expenses: Cost of sales (excluding amortization of intangible assets) 5 133 Selling, general and administrative — — Research and development 31 59 Total operating costs and expenses $ 36 $ 192 Income (loss) from discontinued operations before income taxes 2,703 (192) Provision for income taxes from discontinued operations — — Income (loss) from discontinued operations, net of income taxes $ 2,703 $ (192) Product sales, net for the year ended December 31, 2022 resulted from a reversal of GTN accruals that contractually expired and for which we are no longer liable. NOTE 11. SUBSEQUENT EVENTS During January 2023 and through the date of this filing, we sold and issued 2.0 million shares of our common stock for net proceeds of approximately $1.8 million under the April 2019 ATM Agreement. The Employee Retention Credit (“ERC”) under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) is a refundable tax credit which encouraged businesses to keep employees on the payroll during the COVID-19 pandemic. The ERC was applied for based on delays in the FDA approval process for ROLVEDON. In January 2023, we received $1.2 million ERCs. (1) (1) F-31 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. Item 9A. Controls and Procedures Our principal executive officer and principal financial officer have provided certifications filed as Exhibits 31.1 and 32.1, and 31.2, and 32.2, respectively. Such certifications should be read in conjunction with the information contained in this Item 9A for a more complete understanding of the matters covered by those certifications. (a) Management’s Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) of the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of the financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. This process includes those policies and procedures (i) that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) that receipts and expenditures are being made only in accordance with authorizations of our management and directors; (iii) that provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements; and (iv) that provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP. We continuously seek to improve the efficiency and effectiveness of our business operations and accompanying internal controls. An internal control system, no matter how well conceived and operated, can provide only reasonable assurance that its objectives are met. Because of inherent limitations in any control system, no evaluation can provide absolute assurance that all control issues within a company have been detected. In addition, internal controls are subject to the risk of inadequacy because of changes in business conditions and/or the risk that compliance with a company’s policies or procedures may deteriorate over time. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2022. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013 framework) (“2013 COSO”). Based on our management’s assessment, we have concluded that as of December 31, 2022, our internal control over financial reporting was effective, as evaluated under the 2013 COSO criteria. (b) Disclosure Controls and Procedures We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of December 31, 2022, pursuant to Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures, as of such date, were effective. (c) Changes in Internal Control Over Financial Reporting There have been no changes in our internal control over financial reporting during the fiscal fourth quarter of the year ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 68 Table of Contents Item 9B. Other Information None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections None. PART III Item 10. Directors, Executive Officers and Corporate Governance The information required under this item is incorporated by reference from our definitive proxy statement related to our 2023 Annual Meeting of Stockholders (the “2023 Proxy Statement”), to be filed pursuant to Regulation 14A, on or before April 30, 2023, provided that if the 2023 Proxy Statement is not filed within 120 days of the fiscal year covered by this Annual Report, the omitted information will be included in an amendment to this Annual Report filed not later than the end of such 120-day period. We have adopted a written code of ethics applicable to our directors, officers and employees (“Code of Ethics”). We will provide to any person, without charge, a copy of such Code of Ethics upon written request, which may be mailed to 2 Atlantic Avenue, 6th Floor, Boston, MA 02110, Attn: Corporate Secretary. Item 11. Executive Compensation The information required under this item is incorporated herein by reference from the 2023 Proxy Statement. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The information required under this item is incorporated herein by reference from the 2023 Proxy Statement. Item 13. Certain Relationships and Related Transactions, and Director Independence. The information required under this item is incorporated herein by reference from the 2023 Proxy Statement. Item 14. Principal Accounting Fees and Services The information required under this item is incorporated herein by reference from the 2023 Proxy Statement. 69 Table of Contents Part IV Item 15. Exhibits and Financial Statement Schedules (a) Financial Statements and Schedules The following financial statements and schedules listed below are included in this Annual Report: Reports of Independent Registered Public Accounting Firm Consolidated Balance Sheets as of December 31, 2022 and 2021 Consolidated Statements of Operations for the years ended December 31, 2022 and 2021 Consolidated Statements of Comprehensive Loss for the years ended December 31, 2022 and 2021 Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2022 and 2021 Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021 Notes to the Consolidated Financial Statements (All other schedules are omitted, as required information is either not applicable or the information is presented in the consolidated financial statements). 70 Table of Contents (b) Exhibits The following is a list of exhibits required by Item 601 of Regulation S-K filed as part of this Annual Report. For exhibits that previously have been filed, the Company incorporates those exhibits herein by reference. The exhibit table below includes the Form Type and Filing Date of the previous filing and the original exhibit number in the previous filing which is being incorporated by reference herein. Exhibit No. Description Form File No. Exhibit Filing Date Filed Herewith 2.1 Agreement and Plan of Merger, dated April 4, 2012, by and among Spectrum Pharmaceuticals, Inc., Sapphire Acquisition Sub, Inc. and Allos Therapeutics, Inc., including a Form of Contingent Value Rights Agreement and a Form of Tender and Voting Agreement. 8-K 001-35006 2.1, 2.2, and 2.3 4/5/12 2.2 Securities Purchase Agreement, dated July 16, 2013, by and among Spectrum Pharmaceuticals, Inc., Eagle Acquisition Merger Sub, Inc., certain entities affiliated with Warburg Pincus & Co. and certain entities affiliated with Deerfield Management, LLC. 8-K 001-35006 2.1 7/19/13 2.3 Stock Purchase Agreement, dated July 16, 2013, by and among Spectrum Pharmaceuticals, Inc., Eagle Acquisition Merger Sub, Inc. and Talon Therapeutics, Inc. 8-K 001-35006 2.2 7/19/13 2.4 Exchange Agreement, dated July 16, 2013, by and among Spectrum Pharmaceuticals, Inc., Talon Therapeutics, Inc. and certain entities affiliated with Deerfield Management, LLC, including the Registration Rights Agreement by and among Spectrum Pharmaceuticals, Inc. and certain entities affiliated with Deerfield Management, LLC, as Exhibit A thereto. 8-K 001-35006 2.4 7/19/13 2.5 Asset Purchase Agreement, dated January 17, 2019, by and among Spectrum Pharmaceuticals, Inc., Acrotech Biopharma LLC and Aurobindo Pharma USA, Inc. 8-K 001-35006 10.1 1/17/19 2.6 Securities Purchase Agreement, dated January 3, 2022, between Spectrum Pharmaceuticals, Inc. and Hanmi Pharmaceutical Co., Ltd. 8-K 001-35006 10.1 1/3/22 3.1 Restated Certificate of Incorporation, as filed on June 18, 2018. 8-K 001-35006 3.1 6/18/18 3.2 Third Amended and Restated Bylaws of Spectrum Pharmaceuticals, Inc. 8-K 001-35006 3.1 3/29/18 4.1 Registration Rights and Stockholder Agreement, dated February 2, 2010, by and between Spectrum Pharmaceuticals, Inc. and TopoTarget A/S. 10-K 001-35006 4.2 3/12/14 4.2 Description of Equity Securities Registered under Section 12 of the Exchange Act. 10-K 001-35006 4.5 3/17/22 10.1 Industrial Lease Agreement, dated January 16, 1997, between Spectrum Pharmaceuticals, Inc. and the Irvine Company. 10-KSB 000-28782 10.11 3/31/97 10.2 First Amendment to Lease, dated March 25, 2004, by and between Spectrum Pharmaceuticals, Inc. and the Irvine Company. 10-Q 000-28782 10.1 5/17/04 10.3 Second Amendment to Lease, dated March 7, 2006, by and between Spectrum Pharmaceuticals, Inc. and the Irvine Company. 10-K 001-35006 10.6 3/12/14 10.4 Third Amendment to Lease, dated February 12, 2006, by and between Spectrum Pharmaceuticals, Inc. and the Irvine Company LLC. 10-K 001-35006 10.7 3/12/14 10.5 Fourth Amendment to Lease, dated July 29, 2009, by and between Spectrum Pharmaceuticals, Inc. and the Irvine Company LLC. 10-K 000-28782 10.29 4/5/10 10.6 Fifth Amendment to Lease, dated November 21, 2013, by and between Spectrum Pharmaceuticals, Inc. and the Irvine Company LLC. 10-K 001-35006 10.9 3/12/14 10.7 Sixth Amendment to Lease, dated January 31, 2014, by and between Spectrum Pharmaceuticals, Inc. and the Irvine Company LLC. 10-K 001-35006 10.10 3/12/14 71 Table of Contents 10.8 Seventh Amendment to Lease, dated August 7, 2018, by and between Spectrum Pharmaceuticals, Inc. and the Irvine Company LLC. 10-K 001-35006 10.8 3/2/20 10.9 Eighth Amendment to Lease, dated October 10, 2018, by and between Spectrum Pharmaceuticals, Inc. and the Irvine Company LLC. 10-K 001-35006 10.9 3/2/20 10.10* Spectrum Pharmaceuticals, Inc. Deferred Compensation Plan. S-8 333-176681 4.1 9/6/11 10.11* Form of Indemnification Agreement of Spectrum Pharmaceuticals, Inc. 10-K 001-35006 10.11 3/2/20 10.12* Amended and Restated Spectrum Pharmaceuticals, Inc. 2009 Employee Stock Purchase Plan. 10-K 001-35006 10.12 3/2/20 10.13* Spectrum Pharmaceuticals, Inc. 2009 Incentive Award Plan. S-8 333-160312 99.2 6/29/09 10.14* Term Sheet for 2009 Incentive Award Plan Stock Option Award. 10-Q 000-28782 10.8 8/13/09 10.15* Term Sheet for 2009 Incentive Award Plan, Nonqualified Stock Option Award Awarded to Non-Employee Directors (Revised July 2012). 10-Q 001-35006 10.2 11/9/12 10.16* Term Sheet for 2009 Incentive Award Plan, Restricted Stock Award. 10-Q 000-28782 10.10 8/13/09 10.17* Amendment No. 1 to 2009 Incentive Award Plan. 10-Q 001-35006 10.2 11/6/15 10.18* Form of Performance Unit Award Agreement under 2009 Incentive Award Plan 10-Q 001-35006 10.2 5/4/17 10.19 Controlled Equity Offering Sales Agreement, dated as of April 5, 2019 among Registrant, Cantor Fitzgerald & Co., H.C. Wainwright & Co., LLC and B. Riley FBR, Inc. S-3ASR 333-230821 1.2 4/5/19 10.20* Executive Employment Agreement, dated April 19, 2022, by and between Spectrum Pharmaceuticals, Inc. and Nora Brennan 10-Q 001-35006 10.1 8/12/22 10.21* Executive Employment Agreement, dated as of April 10, 2018, by and between Spectrum Pharmaceuticals, Inc. and Thomas J. Riga. 10-Q 001-35006 10.7 8/9/18 10.22* Executive Employment Agreement, dated as of June 18, 2018, by and between Spectrum Pharmaceuticals, Inc. and Keith McGahan. 10-Q 001-35006 10.9 8/9/18 10.23* Spectrum Pharmaceuticals, Inc. 2018 Long-Term Incentive Plan 8-K 001-35006 10.1 6/18/18 10.24* First Amendment to the Spectrum Pharmaceuticals, Inc. 2018 Long-Term Incentive Plan 8-K 001-35006 10.1 6/19/20 10.25* Form of NEO Stock Option Award under the Spectrum Pharmaceuticals, Inc. 2018 Long-Term Incentive Plan X 10.26* Form of NEO Restricted Stock Unit Award under the Spectrum Pharmaceuticals, Inc. 2018 Long-Term Incentive Plan. X 10.27* Form of Non-NEO Stock Option Award under the Spectrum Pharmaceuticals, Inc. 2018 Long-Term Incentive Plan X 10.28* Form of Non-NEO Restricted Stock Unit Award under the Spectrum Pharmaceuticals, Inc. 2018 Long-Term Incentive Plan X 10.29* Form of Restricted Stock Unit Award for Canadian Resident Employees and Directors under the Spectrum Pharmaceuticals, Inc. 2018 Long-Term Incentive Plan. 8-K 001-35006 10.4 6/18/18 10.30* Form of Performance Unit Award under the Spectrum Pharmaceuticals, Inc. 2018 Long- Term Incentive Plan. 8-K 001-35006 10.5 6/18/18 10.31* Form of Stock Appreciation Rights Agreement under the Spectrum Pharmaceuticals, Inc. 2018 Long-Term Incentive Plan 8-K 001-35006 10.1 3/13/20 10.32* Spectrum Pharmaceuticals, Inc. 2022 Employment Inducement Incentive Award Plan 10-Q 001-35006 10.1 11/10/22 10.33* Form of Stock Option Award Agreement under the Spectrum Pharmaceuticals, Inc. 2022 Employment Inducement Incentive Award Plan 10-Q 001-35006 10.2 11/10/22 10.34* Form of Restricted Stock Unit Award Agreement under the Spectrum Pharmaceuticals, Inc. 2022 Employment Inducement Incentive Award Plan 10-Q 001-35006 10.3 11/10/22 72 Table of Contents 10.35 License, Development and Supply Agreement, dated as of October 8, 2014, by and between Spectrum Pharmaceuticals, Inc. and Hanmi Pharmaceuticals Co., Ltd X 10.36 First Amendment to License, Development and Supply Agreement, dated as of February 28, 2018, by and between Spectrum Pharmaceuticals, Inc. and Hanmi Pharmaceuticals Co., Ltd. X 10.37 Second Amendment to License, Development and Supply Agreement, dated as of January 1, 2022, by and between Spectrum Pharmaceuticals, Inc. and Hanmi Pharmaceuticals Co., Ltd. X 10.38 Supply Agreement, dated as of February 28, 2018, by and between Spectrum Pharmaceuticals, Inc. and Hanmi Pharmaceuticals Co., Ltd. X 10.39 First Amendment to Supply Agreement, dated as of December 6, 2019, by and between Spectrum Pharmaceuticals, Inc. and Hanmi Pharmaceuticals Co., Ltd. X 10.40 Second Amendment to Supply Agreement, dated as of January 1, 2022, by and between Spectrum Pharmaceuticals, Inc. and Hanmi Pharmaceuticals Co., Ltd. X 10.41 Loan and Security Agreement, dated as of September 21, 2022, by and among Spectrum Pharmaceuticals, Inc., the other borrowers party thereto, the lenders party thereto and SLR Investment Corp. as collateral agent 8-K 001-35006 10.1 9/23/22 21.1 Subsidiaries of Registrant. X 23.1 Consent of Independent Registered Public Accounting Firm (RSM US LLP). X 31.1 Certification of Principal Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934. X 31.2 Certification of Principal Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934. X 32.1 Certification of Principal Executive Officer, pursuant to Rule 13a-14(b)/15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350. X 32.2 Certification of Principal Financial Officer, pursuant to Rule 13a-14(b)/15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350. X 101.INS Inline XBRL Instance Document - the Instance Document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL Document X 101.SCH Inline XBRL Taxonomy Extension Schema Document X 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document X 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document X 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document X 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document X 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101 filed herewith) * Indicates a management contract or compensatory plan or arrangement. 73 Table of Contents Item 16. Form 10-K Summary None. 74 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized. Spectrum Pharmaceuticals, Inc. Date: March 31, 2023 By: /s/ THOMAS J. RIGA Thomas J. Riga President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated: Signature Title Dates /s/ THOMAS J. RIGA President, Chief Executive Officer and Director March 31, 2023 Thomas J. Riga /s/ NORA E. BRENNAN Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) March 31, 2023 Nora E. Brennan /s/ WILLIAM L. ASHTON Chairman of the Board March 31, 2023 William L. Ashton /s/ BRITTANY BRADRICK Director March 31, 2023 Brittany Bradrick /s/ SETH H.Z. FISCHER Director March 31, 2023 Seth H.Z. Fischer /s/ JEFFREY L. VACIRCA, M.D., F.A.C.P. Director March 31, 2023 Jeffrey L. Vacirca, M.D., F.A.C.P. /s/ JUHYUN LIM Director March 31, 2023 Juhyun Lim 75 SPECTRUM PHARMACEUTICALS, INC. TERM SHEET FOR 2018 LONG-TERM INCENTIVE PLAN STOCK OPTION AWARD Spectrum Pharmaceuticals, Inc. (the “Company”) hereby grants to the Participant named below a stock option (the “Option”) to purchase any part or all of the number of Shares that are covered by this Option, as specified below, at the exercise price specified below, under the Spectrum Pharmaceuticals, Inc. 2018 Long-Term Incentive Plan (the “Plan”). The Option is governed by the terms and subject to the conditions set forth in this Term Sheet, the Plan and the Plan’s Standard Terms and Conditions (the “Standard Terms and Conditions”), each as amended from time to time (the Term Sheet and the Standard Terms and Conditions, as in effect at the time of the execution of the Term Sheet, together constituting the “Award Agreement” between Participant and the Company). This Option is granted pursuant to the Plan and is subject to and qualified in its entirety by the Award Agreement. If the Award Agreement conflicts with the Plan, the Plan will control. Capitalized terms not explicitly defined herein are defined in the Plan. Name of Participant: Grant Date: Type of Option: Non-Qualified Stock Option Number of Shares covered by Option: Exercise Price Per Share: $ Vesting Commencement Date: ☐ Same as Grant Date ☐ Date:______________________ Vesting Schedule: [Insert Vesting Schedule] Expiration Date: The ten-year anniversary of the Grant Date By accepting this Term Sheet, Participant acknowledges that he or she has received and read, and agrees that this Option shall be subject to, and Participant shall comply with, the terms of the Award Agreement and the Plan. IN WITNESS WHEREOF, the Company has caused this Option to be executed by its duly authorized officer. SPECTRUM PHARMACEUTICALS, INC. Thomas J. Riga CEO & President [Participant Signature page follows on the reverse side of this Term Sheet] PARTICIPANT’S ACCEPTANCE The undersigned hereby accepts the foregoing Option and agrees to the terms and conditions of the Award Agreement and the Plan, including, without limitation, the provisions of Section 17 of the Award Agreement which amend the terms of Participant’s Existing Stock Awards (as defined in the Award Agreement) and Employment Arrangements (as defined in the Award Agreement). The undersigned hereby acknowledges receipt of the attached Standard Terms and Conditions and that a copy of the Plan is available on the Company’s intranet. PARTICIPANT _______________________________________ Signature SPECTRUM PHARMACEUTICALS, INC. STANDARD TERMS AND CONDITIONS FOR STOCK OPTIONS These Standard Terms and Conditions apply to any Options granted under the Spectrum Pharmaceuticals, Inc. 2018 Long-Term Incentive Plan (the “Plan”) that are evidenced by a Term Sheet or an action of the Committee that specifically refers to these Standard Terms and Conditions (the Term Sheet and the Standard Terms and Conditions, as in effect at the time of the execution of the Term Sheet, together constituting the “Award Agreement” between Participant and the Company). Capitalized terms not otherwise defined herein shall have the meaning set forth in the Plan. 1. TERMS OF OPTION In consideration of Participant’s agreement to commence employment with and remain in the employ of the Company or any Affiliate, the Company has granted to the Participant named in the Term Sheet provided to Participant herewith an Option to purchase up to the number of Shares set forth in the Term Sheet, at the exercise price per Share set forth in the Term Sheet, and upon the other terms and subject to the conditions set forth in the Award Agreement and the Plan. 2. EXERCISE OF OPTION The Option shall continue to vest, in accordance with the Vesting Schedule set forth on the Term Sheet, so long as Participant remains in Continuous Service with the Company. Participant may exercise any vested portion of the Option at any time prior to the Expiration Date of the Option, except as otherwise provided in the Plan. To exercise the Option (or any part thereof), Participant shall provide notice to the Company specifying the number of Shares Participant wishes to purchase and how Participant’s Shares should be registered (in Participant’s name only or in Participant’s and Participant’s spouse’s names as community property or as joint tenants with right of survivorship). The exercise price (the “Exercise Price”) of the Option is set forth in the Term Sheet. The Company shall not be obligated to issue any Shares until Participant has paid the total Exercise Price for that number of Shares. The Exercise Price may be paid by one or more of the following means: (i) by cash or check payable to the Company; (ii) if permitted by the Committee in its sole discretion, by delivery to the Company of already-owned Shares having a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the Shares as to which the Option is being exercised; (iii) if permitted by the Committee in its sole discretion, by a “net exercise” arrangement whereby Participant surrenders to the Company Shares otherwise receivable upon exercise of the Option (e.g., the Company will reduce the number of Shares issued upon exercise of the Option by the largest whole number of Shares with a Fair Market Value that does not exceed the aggregate Exercise Price); (iv) by a cashless exercise program that the Committee may approve, from time to time in its discretion, pursuant to which a Participant may elect to concurrently provide irrevocable instructions (A) to Participant’s broker or dealer to effect the immediate sale of the purchased Shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the Exercise Price of the Option plus all applicable withholding taxes, and (B) to the Company to deliver the certificates for the purchased Shares directly to the broker or dealer in order to complete the sale; or (v) if permitted by the Committee in its sole discretion, in any other form of legal consideration. Fractional Shares will not be issued. Shares will be issued as soon as practical after exercise. Notwithstanding the above, the Company shall not be obligated to deliver any Shares during any period when the Company determines that the exercisability of the Option or the delivery of Shares hereunder would violate Applicable Law. 3. EXPIRATION OF OPTION The Option shall expire and cease to be exercisable on the Expiration Date set forth in the Term Sheet. 4. RESTRICTIONS ON RESALES OF OPTION SHARES The Company may impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by Participant or other subsequent transfers by Participant of any Shares issued as a result of the exercise of the Option, including without limitation (a) restrictions under an insider trading policy, (b) restrictions designed to delay and/or coordinate the timing and manner of sales by Participant and other optionholders, (c) restrictions as to the use of a specified brokerage firm for such resales or other transfers or (d) restrictions under Applicable Law. 5. INCOME TAXES Participant shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise by reason of an Option exercise or disposition of Shares issued as a result of an Option exercise. The Company shall not be required to issue Shares or to recognize the disposition of such Shares until such obligations are satisfied. 6. TRANSFERABILITY OF OPTION Except as required by Applicable Law, the Option shall not be assignable, alienable, saleable, or transferable by Participant except by will or by the laws of descent and distribution provided, however, that Participant may, in the manner established by the Committee, designate a beneficiary or beneficiaries to exercise the rights of Participant with respect to the Option on the death of Participant. The Option shall be exercisable, during Participant’s lifetime, only by Participant or, if permissible under Applicable Law, by Participant’s guardian or legal representative. The Option may not be pledged, alienated, attached, or otherwise encumbered, and any purported pledge, alienation, attachment, or encumbrance thereof shall be void and unenforceable against the Company. Notwithstanding the foregoing, the Participant may transfer some or all of his or her Options to one or more “family members,” which is not a “prohibited transfer for value,” provided that (i) the Participant (or such Participant’s estate or representative) shall remain obligated to satisfy all income or other tax withholding obligations associated with the exercise of such Option; (ii) the Participant shall notify the Company in writing that such transfer has occurred and disclose to the Company the name and address of the “family member” or “family members” and their relationship to Participant, and (iii) such transfer shall be effected pursuant to transfer documents in a form approved by the Committee. For purposes of the foregoing, the terms “family members” and “prohibited transfer for value” have the meaning ascribed to them in the General Instructions to form S-8 (or any successor form) promulgated under the Securities Act of 1933, as amended. 7. REPRESENTATIONS AND WARRANTIES Participant acknowledges that Applicable Law may require the placement of certain restrictive legends upon the Shares issued upon exercise of the Option, and Participant hereby consents to the placing of any such legends upon certificates evidencing the Shares as the Company may deem necessary or advisable. Participant acknowledges that he or she shall be solely responsible for the satisfaction of any taxes or interest or other consequence, that may arise pursuant to the Option (including taxes arising under Code Section 409A of the Code), and neither the Company nor the Committee nor anyone other than Participant, or his or her estate or beneficiaries, shall have any obligation whatsoever to pay such taxes or interest or to otherwise indemnify or hold Participant harmless from any or all of such taxes. Notwithstanding any other provision of the Plan or this Agreement, if the Participant is subject to Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), then the Plan, the Award and this Award Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by Applicable Law, this Award Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule. 8. THE PLAN AND OTHER AGREEMENTS In addition to the Award Agreement, the Option shall be subject to the terms of the Plan, which are incorporated into the Award Agreement by this reference. A copy of the Plan, and the accompanying prospectus, is available at the Company’s intranet site. The Award Agreement and the Plan constitute the entire understanding between Participant and the Company regarding the Option. Any prior agreements, commitments or negotiations concerning the Option are superseded. 9. LIMITATION OF INTEREST IN SHARES SUBJECT TO OPTION Neither Participant (individually or as a member of a group) nor any beneficiary or other person claiming under or through Participant shall have any right, title, interest, or privilege in or to any Shares allocated or reserved for the purpose of the Plan or subject to the Award Agreement except as to such Shares, if any, as shall have been issued to such person upon exercise of the Option. 10. NO EMPLOYMENT RIGHT Nothing in the Plan, in the Award Agreement or any other instrument executed pursuant to the Plan shall confer upon Participant any right to continue in the Company’s employ or service nor limit in any way the Company’s right to terminate Participant’s Continuous Service at any time for any reason. 11. GENERAL In the event that any provision of the Award Agreement is declared to be illegal, invalid or otherwise unenforceable by a court of competent jurisdiction, such provision shall be reformed, if possible, to the extent necessary to render it legal, valid and enforceable, or otherwise deleted, and the remainder of the Award Agreement shall not be affected except to the extent necessary to reform or delete such illegal, invalid or unenforceable provision. Section headings are inserted solely for convenience of reference, and shall not constitute a part of the Award Agreement, nor shall they affect its meaning, construction or effect. Except as otherwise provided in the Award Agreement or in the Plan, every covenant, term, and provision of the Award Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legatees, legal representatives, successors, transferees, and assigns. The Award Agreement may be modified or amended at any time, in accordance with the Plan and provided that Participant must consent in writing to any modification that would impair his or her rights under the Award Agreement provided that no such consent shall be required with respect to any modification if the Committee determines in its sole discretion that such modification either (i) is required or advisable in order for the Company, the Plan or the Option to satisfy or conform to Applicable Law or to meet the requirements of any accounting standard, or (ii) is not reasonably likely to significantly diminish the benefits provided under such Option. 12. “MARKET STAND-OFF” CONDITIONS Participant agrees that, if requested by the Company, Participant will not sell or otherwise transfer or dispose of any Shares held by Participant without the prior written consent of the Company during such period of time. 13. INTERPRETATION This Option is granted pursuant to the terms of the Plan, and shall in all respects be interpreted in accordance therewith. The Committee shall have the power to interpret the Plan and the Award Agreement and to adopt such rules for the administration, interpretation and application of the Plan and the Award Agreement as are consistent therewith and to interpret or revoke any such rules. Any action, decision, interpretation or determination by the Committee shall be final, binding and conclusive on the Company and Participant. No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, the Award Agreement, or the Option. 14. NOTICES Any notice, demand or request required or permitted to be given under the Award Agreement shall be in writing and shall be deemed given when delivered personally or three (3) days after being deposited in the United States mail, as certified or registered mail, with postage prepaid, and addressed, if to the Company, at its principal place of business, Attention: Legal Department, and if to Participant, at his or her most recent address as shown in the employment or stock records of the Company. 15. GOVERNING LAW The validity, construction, interpretation, and effect of this Option shall be governed by and determined in accordance with the laws of the State of Delaware, regardless of the law that might be applied under principles of conflicts of laws. 16. COUNTERSIGNATURE The Term Sheet may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall be deemed one instrument, and is incorporated herein. 17. AMENDMENT OF ACCELERATED VESTING OF EXISTING EQUITY AWARDS UNDER AWARD AGREEMENTS AND EMPLOYMENT AGREEMENT If (a) Participant has previously been granted any equity awards by the Company under the Plan or any other equity plan maintained by the Company (collectively, the “Equity Plans”) that remain outstanding on the date on which Participant accepts this Award (such awards, the “Existing Stock Awards”), and (b) (i) any award agreement evidencing any such Existing Stock Award (each an “Existing Stock Award Agreement”) provides that it will vest upon the occurrence of a Change in Control (or any similar term used in any such agreement) (without regard to any termination of Continuous Service) (“Single-Trigger Accelerated Vesting”), and/or (ii) any employment or severance agreement with the Company (an “Existing Employment Arrangement”) provides for Single-Trigger Accelerated Vesting of Participant’s Existing Stock Awards, Participant’s acceptance and agreement to the terms of this Award constitutes Participant’s consent to the amendment of each Existing Stock Award Agreement and Participant’s Existing Employment Arrangements, effective as of April 10, 2023, to remove the Single-Trigger Accelerated Vesting. To the extent Participant is a party to an Existing Employment Arrangement with the Company that provides for accelerated vesting of this Award and any Existing Stock Awards upon certain terminations of Continuous Service following a Change in Control (or any similar term used in any such agreement) (“Double-Trigger Accelerated Vesting”), such Double-Trigger Accelerated Vesting provisions shall continue to apply to this Award, Participant’s Existing Stock Awards and any future equity awards granted by the Company to Participant under any Equity Plan. This Section 17 constitutes an amendment of Participant’s Existing Stock Award Agreements and any Existing Employment Agreement and will be deemed a part of the Existing Stock Award Agreements evidencing Participant’s previously-granted Stock Awards and any Existing Employment Arrangement. Except as set forth in this Paragraph 17, all of the remaining terms of Participant’s Existing Stock Award Agreements and Participant’s Existing Employment Arrangements remain unchanged and in full force and effect. Nothing in this Section 17 shall prevent the Committee from, in its sole discretion, approving the accelerated vesting of this Award in connection with a Change in Control. In the event a Change in Control occurs prior to April 10, 2023, the Single-Trigger Accelerated Vesting shall continue to apply in accordance with the Existing Stock Award Agreements and Existing Employment Arrangements. SPECTRUM PHARMACEUTICALS, INC. TERM SHEET FOR 2018 LONG-TERM INCENTIVE PLAN RESTRICTED STOCK UNIT AWARD Spectrum Pharmaceuticals, Inc. (the “Company”) hereby grants to the Participant named below Restricted Stock Units (the “RSUs”) covering the number of Shares specified below (the “Award”), under the Spectrum Pharmaceuticals, Inc. 2018 Long-Term Incentive Plan (the “Plan”). This Award is governed by the terms and subject to the conditions set forth in this Term Sheet, the Plan and the Plan’s Standard Terms and Conditions (the “Standard Terms and Conditions”), each as amended from time to time (the Term Sheet and the Standard Terms and Conditions, as in effect at the time of the execution of the Term Sheet, together constituting the “Award Agreement” between the Participant and the Company). This Award is granted pursuant to the Plan and is subject to and qualified in its entirety by the Award Agreement. If the Award Agreement conflicts with the Plan, the Plan will control. Capitalized terms not explicitly defined herein are defined in the Plan. Name of Participant: #ParticipantName# Grant Date: #GrantDate# Number of RSUs: #QuantityGranted# Vesting Commencement Date: ☐ Same as Grant Date ☐ Date: _ #GrantDate#_ Vesting/Issuance Schedule: One Share will be issued for each vested RSU. The RSUs shall vest as follows: #VestingDateandQuantity# By accepting this Term Sheet, Participant acknowledges that he or she has received and read, and agrees that this Award shall be subject to, the terms of the Award Agreement and the Plan. IN WITNESS WHEREOF, the Company has caused this Restricted Stock Unit Award to be executed by its duly authorized officer. SPECTRUM PHARMACEUTICALS, INC. Thomas J. Riga CEO & President [Participant Signature page follows on the reverse side of this Term Sheet] PARTICIPANT’S ACCEPTANCE The undersigned hereby accepts the foregoing Restricted Stock Unit Award and agrees to the terms and conditions of the Award Agreement and the Plan, including, without limitation, the provisions of Section 16 of the Award Agreement which amend the terms of Participant’s Existing Stock Awards (as defined in the Award Agreement) and Employment Arrangements (as defined in the Award Agreement). The undersigned hereby acknowledges receipt of the attached Standard Terms and Conditions and that a copy of the Plan is available on the Company’s intranet. PARTICIPANT ___#Signature#__________ Signature SPECTRUM PHARMACEUTICALS, INC. STANDARD TERMS AND CONDITIONS FOR RESTRICTED STOCK UNIT AWARDS These Standard Terms and Conditions apply to any Restricted Stock Units (“RSUs”) granted under the Spectrum Pharmaceuticals, Inc. 2018 Long-Term Incentive Plan (the “Plan”) that are evidenced by a Term Sheet or an action of the Committee that specifically refers to these Standard Terms and Conditions (the Term Sheet and the Standard Terms and Conditions, as in effect at the time of the execution of the Term Sheet, together constituting the “Award Agreement” between Participant and the Company) (the “Award”). Capitalized terms not otherwise defined herein shall have the meaning set forth in the Plan. 1. TERMS OF RSUS In consideration of Participant’s agreement to commence employment with and remain in the employ of the Company or any Affiliate, the Company has granted to the Participant named in the Term Sheet provided to Participant herewith the number of RSUs set forth in the Term Sheet. The Award represents the right to be issued, on a future date, the number of Shares that is equal to the number of RSUs indicated in the Term Sheet, subject to Participant’s satisfaction of the vesting conditions set forth therein. 2. VESTING OF RSUs The RSUs shall vest, in accordance with the Vesting Schedule set forth in the Term Sheet, so long as Participant remains in Continuous Service with the Company. Unless otherwise determined by the Committee or set forth in a written agreement between Participant and the Company, in the event that Participant’s Continuous Service terminates for any reason, any portion of the RSUs that are unvested as of such termination date shall remain unvested and shall be immediately forfeited without any further action by the Company or the Participant. On or as soon as administratively practicable (and within thirty (30) days) following the date on which a portion of the RSUs covered by the Award Agreement vests (each, a “Vesting Date”), the Company will deliver to the Participant a number of Shares (either by delivering one or more certificates for such Shares or by entering such Shares in book entry form, as determined by the Company in its discretion) equal to the number of RSUs subject to the Award Agreement that vest on the applicable Vesting Date, subject to the satisfaction of any applicable tax withholding obligations; provided, however, that if, at the time of proposed settlement, the Participant is restricted from transacting in Shares due to Company policy, settlement shall be delayed until the Participant is no longer restricted from transacting in Shares or, if earlier, March 15 of the year following the year in which the Vesting Date occurred. No fractional RSUs or rights for fractional Shares shall be created pursuant to the Award Agreement. 2. NO RIGHTS AS A STOCKHOLDER Until Shares are issued to Participant, Participant shall have no rights as a stockholder, including, but not limited to, the right to vote the Shares underlying the RSUs and the right to receive dividends or other distributions paid or made with respect to Shares. Participant shall receive no benefit or adjustment to the Award with respect to any cash dividend, stock dividend or other distribution unless the Committee makes an adjustment to the Award as provided in the Plan; provided, however, that this sentence shall not apply with respect to any Shares that are delivered to the Participant pursuant to the Award after such Shares have been delivered. 3. RESTRICTIONS ON RESALES OF AWARD SHARES The Company may impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by Participant or other subsequent transfers by Participant of any Shares issued as a result of the vesting of RSUs awarded pursuant to the Award Agreement, including without limitation (a) restrictions under an insider trading policy, (b) restrictions designed to delay and/or coordinate the timing and manner of sales by the Participant and other stockholders, (c) restrictions as to the use of a specified brokerage firm for such resales or other transfers or (d) restrictions under Applicable Law. 4. INCOME TAXES Participant (and not the Company) shall be responsible for Participant’s own tax liability that may arise as a result of the acquisition of the Shares underlying the Award. Participant shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise by reason of the vesting of RSUs or disposition of any Shares issued as a result of the vesting of RSUs. The Company shall not be required to issue Shares or to recognize the disposition of such Shares until such obligations are satisfied, and if such obligations are not satisfied by the earlier of (a) the date required by the Board or (b) March 15 of the year following the year in which vesting of such underlying Shares occurred, all such rights with respect to such RSUs and underlying Shares shall be forfeited without compensation. Participant may elect to satisfy any tax withholding obligation (a) in cash, (b) with the consent of the Committee, by requesting that the Company withhold a net number of vested Shares otherwise issuable pursuant to the RSUs having a then current Fair Market Value not exceeding the amount necessary to satisfy the tax withholding obligation of the Company based on the minimum applicable statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes, or (c) through the delivery of a notice that Participant has placed a market sell order with a broker acceptable to the Company with respect to the Shares issuable pursuant to the RSUs then vesting and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the tax withholding obligation; provided that payment of such proceeds is then made to the Company at such time as may be required by the Committee, but in any event not later than the settlement of such sale. Unless Participant elects to satisfy the tax withholding obligation by one of the means described in clauses (a) or (c) above, or any other method permitted by the Plan, the Company has the right and option, but not the obligation, to treat Participant’s failure to provide timely payment in accordance with the Plan of any withholding tax arising in connection with the RSUs as Participant’s election to satisfy all or any portion of the withholding tax by requesting the Company retain Shares otherwise issuable under the Award based on the minimum applicable statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes. 5. TRANSFERABILITY OF RSUs Except as required by Applicable Law, the RSUs shall not be assignable, alienable, saleable, or transferable by Participant except by will or by the laws of descent and distribution provided, however, that Participant may, in the manner established by the Committee, designate a beneficiary or beneficiaries to exercise the rights of Participant with respect to the RSUs on the death of Participant. The RSUs may not be pledged, alienated, attached, or otherwise encumbered, and any purported pledge, alienation, attachment, or encumbrance thereof shall be void and unenforceable against the Company. Notwithstanding the foregoing, Participant may transfer some or all of the RSUs to one or more “family members,” which is not a “prohibited transfer for value,” provided that (a) the Participant (or such Participant’s estate or representative) shall remain obligated to satisfy all income or other tax withholding obligations associated with the RSUs; (b) the Participant shall notify the Company in writing that such transfer has occurred and disclose to the Company the name and address of the “family member” or “family members” and their relationship to Participant, and (c) such transfer shall be effected pursuant to transfer documents in a form approved by the Committee. For purposes of the foregoing, the terms “family members” and “prohibited transfer for value” have the meaning ascribed to them in the General Instructions to form S-8 (or any successor form) promulgated under the Securities Act of 1933, as amended (the “Securities Act”). 6. REPRESENTATIONS AND WARRANTIES Participant acknowledges that Applicable Law may require the placement of certain restrictive legends upon the Shares issued upon vesting of RSUs, and Participant hereby consents to the placing of any such legends upon certificates evidencing the Shares as the Company may deem necessary or advisable. Participant acknowledges that he or she shall be solely responsible for the satisfaction of any taxes or interest or other consequence that may arise pursuant to the RSUs (including taxes arising under Section 409A (as defined below)), and neither the Company nor the Committee nor anyone other than Participant, or his or her estate or beneficiaries, shall have any obligation whatsoever to pay such taxes or interest or to otherwise indemnify or hold Participant harmless from any or all of such taxes. Notwithstanding any other provision of the Plan or this Award Agreement, if the Participant is subject to Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), then the Plan, the Award and this Award Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by Applicable Law, this Award Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule. 7. THE PLAN AND OTHER AGREEMENTS In addition to the Award Agreement, the Award shall be subject to the terms of the Plan, which are incorporated into the Award Agreement by this reference. A copy of the Plan, and the accompanying prospectus is available at the Company’s intranet site. The Award Agreement and the Plan constitute the entire understanding between Participant and the Company regarding the Award. Any prior agreements, commitments or negotiations concerning the Award are superseded. 8. NO EMPLOYMENT RIGHT Nothing in the Plan, in the Award Agreement or any other instrument executed pursuant to the Plan shall confer upon Participant any right to continue in the Company’s employ nor limit in any way the Company’s right to terminate Participant’s Continuous Service at any time for any reason. 9. GENERAL In the event that any provision of the Award Agreement is declared to be illegal, invalid or otherwise unenforceable by a court of competent jurisdiction, such provision shall be reformed, if possible, to the extent necessary to render it legal, valid and enforceable, or otherwise deleted, and the remainder of the Award Agreement shall not be affected except to the extent necessary to reform or delete such illegal, invalid or unenforceable provision. Section headings are inserted solely for convenience of reference, and shall not constitute a part of the Award Agreement, nor shall they affect its meaning, construction or effect. Except as otherwise provided in the Award Agreement or in the Plan, every covenant, term, and provision of the Award Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legatees, legal representatives, successors, transferees, and assigns. The Award Agreement may be modified or amended at any time, in accordance with the Plan and provided that Participant must consent in writing to any modification that would impair his or her rights under the Award Agreement provided that no such consent shall be required with respect to any modification if the Committee determines in its sole discretion that such modification either (a) is required or advisable in order for the Company, the Plan or the Award to satisfy or conform to Applicable Law or to meet the requirements of any accounting standard, or (b) is not reasonably likely to significantly diminish the benefits provided under such Award. 10. “MARKET STAND-OFF” CONDITIONS Participant agrees that, if requested by the Company, Participant will not sell or otherwise transfer or dispose of any Shares issued to Participant pursuant to the Award without the prior written consent of the Company during such period of time. 11. INTERPRETATION This Award is granted pursuant to the terms of the Plan, and shall in all respects be interpreted in accordance therewith. The Committee shall have the power to interpret the Plan and the Award Agreement and to adopt such rules for the administration, interpretation and application of the Plan and the Award Agreement as are consistent therewith and to interpret or revoke any such rules. Any action, decision, interpretation or determination by the Committee shall be final, binding and conclusive on the Company and Participant. No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, the Award Agreement, or the Award. 12. NOTICES Any notice, demand or request required or permitted to be given under the Award Agreement shall be in writing and shall be deemed given when delivered personally or three (3) days after being deposited in the United States mail, as certified or registered mail, with postage prepaid, and addressed, if to the Company, at its principal place of business, Attention: Legal Department, and if to Participant, at his or her most recent address as shown in the employment or stock records of the Company. 13. GOVERNING LAW The validity, construction, interpretation, and effect of this Award shall be governed by and determined in accordance with the laws of the State of Delaware, regardless of the law that might be applied under principles of conflicts of laws. 14. COUNTERSIGNATURE The Term Sheet may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall be deemed one instrument, and is incorporated herein. 15. Section 409A Notwithstanding any other provision of the Plan or the Award Agreement, the Plan and the Award Agreement shall be interpreted in accordance with, and incorporate the terms and conditions required by, Section 409A of the Code (together with any Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Grant Date, “Section 409A”). The Committee may, in its discretion, adopt such amendments to the Plan or the Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Committee determines are necessary or appropriate to comply with the requirements of Section 409A. This Award is not intended to provide for any deferral of compensation subject to Section 409A, and, accordingly, the Shares issuable pursuant to the RSUs hereunder shall be distributed to Participant no later than the later of: (a) the fifteenth (15th) day of the third month following Participant’s first taxable year in which such RSUs are no longer subject to a substantial risk of forfeiture, and (b) the fifteenth (15th) day of the third month following the first taxable year of the Company in which such RSUs are no longer subject to substantial risk of forfeiture, as determined in accordance with Section 409A and any Treasury Regulations and other guidance issued thereunder. 16. AMENDMENT OF ACCELERATED VESTING OF EXISTING EQUITY AWARDS UNDER AWARD AGREEMENTS AND EMPLOYMENT AGREEMENT If (a) Participant has previously been granted any equity awards by the Company under the Plan or any other equity plan maintained by the Company (collectively, the “Equity Plans”) that remain outstanding on the date on which Participant accepts this Award (such awards, the “Existing Stock Awards”), and (b) (i) any award agreement evidencing any such Existing Stock Award (each an “Existing Stock Award Agreement”) provides that it will vest upon the occurrence of a Change in Control (or any similar term used in any such agreement) (without regard to any termination of Continuous Service) (“Single-Trigger Accelerated Vesting”), and/or (ii) any employment or severance agreement with the Company (an “Existing Employment Arrangement”) provides for Single-Trigger Accelerated Vesting of Participant’s Existing Stock Awards, Participant’s acceptance and agreement to the terms of this Award constitutes Participant’s consent to the amendment of each Existing Stock Award Agreement and Participant’s Existing Employment Arrangements, effective as of April 10, 2023, to remove the Single-Trigger Accelerated Vesting. To the extent Participant is a party to an Existing Employment Arrangement with the Company that provides for accelerated vesting of this Award and any Existing Stock Awards upon certain terminations of Continuous Service following a Change in Control (or any similar term used in any such agreement) (“Double-Trigger Accelerated Vesting”), such Double-Trigger Accelerated Vesting provisions shall continue to apply to this Award, Participant’s Existing Stock Awards and any future equity awards granted by the Company to Participant under any Equity Plan. This Section 16 constitutes an amendment of Participant’s Existing Stock Award Agreements and any Existing Employment Agreement and will be deemed a part of the Existing Stock Award Agreements evidencing Participant’s previously-granted Stock Awards and any Existing Employment Arrangement. Except as set forth in this Paragraph 16, all of the remaining terms of Participant’s Existing Stock Award Agreements and Participant’s Existing Employment Arrangements remain unchanged and in full force and effect. Nothing in this Section 16 shall prevent the Committee from, in its sole discretion, approving the accelerated vesting of this Award in connection with a Change in Control. In the event a Change in Control occurs prior to April 10, 2023, the Single-Trigger Accelerated Vesting shall continue to apply in accordance with the Existing Stock Award Agreements and Existing Employment Arrangements. SPECTRUM PHARMACEUTICALS, INC. TERM SHEET FOR 2018 LONG-TERM INCENTIVE PLAN STOCK OPTION AWARD Spectrum Pharmaceuticals, Inc. (the “Company”) hereby grants to the Participant named below a stock option (the “Option”) to purchase any part or all of the number of Shares that are covered by this Option, as specified below, at the exercise price specified below, under the Spectrum Pharmaceuticals, Inc. 2018 Long-Term Incentive Plan (the “Plan”). The Option is governed by the terms and subject to the conditions set forth in this Term Sheet, the Plan and the Plan’s Standard Terms and Conditions (the “Standard Terms and Conditions”), each as amended from time to time (the Term Sheet and the Standard Terms and Conditions, as in effect at the time of the execution of the Term Sheet, together constituting the “Award Agreement” between Participant and the Company). This Option is granted pursuant to the Plan and is subject to and qualified in its entirety by the Award Agreement. If the Award Agreement conflicts with the Plan, the Plan will control. Capitalized terms not explicitly defined herein are defined in the Plan. Name of Participant: Grant Date: Type of Option: Non-Qualified Stock Option Number of Shares covered by Option: Exercise Price Per Share: $ Vesting Commencement Date: ☐ Same as Grant Date ☐ Date:______________________ Vesting Schedule: [Insert Vesting Schedule] Expiration Date: The ten-year anniversary of the Grant Date By accepting this Term Sheet, Participant acknowledges that he or she has received and read, and agrees that this Option shall be subject to, and Participant shall comply with, the terms of the Award Agreement and the Plan. IN WITNESS WHEREOF, the Company has caused this Option to be executed by its duly authorized officer. SPECTRUM PHARMACEUTICALS, INC. Thomas J. Riga CEO & President [Participant Signature page follows on the reverse side of this Term Sheet] PARTICIPANT’S ACCEPTANCE The undersigned hereby accepts the foregoing Option and agrees to the terms and conditions of the Award Agreement and the Plan. The undersigned hereby acknowledges receipt of the attached Standard Terms and Conditions and that a copy of the Plan is available on the Company’s intranet. PARTICIPANT _______________________________________ Signature SPECTRUM PHARMACEUTICALS, INC. STANDARD TERMS AND CONDITIONS FOR STOCK OPTIONS These Standard Terms and Conditions apply to any Options granted under the Spectrum Pharmaceuticals, Inc. 2018 Long-Term Incentive Plan (the “Plan”) that are evidenced by a Term Sheet or an action of the Committee that specifically refers to these Standard Terms and Conditions (the Term Sheet and the Standard Terms and Conditions, as in effect at the time of the execution of the Term Sheet, together constituting the “Award Agreement” between Participant and the Company). Capitalized terms not otherwise defined herein shall have the meaning set forth in the Plan. 1. TERMS OF OPTION In consideration of Participant’s agreement to commence employment with and remain in the employ of the Company or any Affiliate, the Company has granted to the Participant named in the Term Sheet provided to Participant herewith an Option to purchase up to the number of Shares set forth in the Term Sheet, at the exercise price per Share set forth in the Term Sheet, and upon the other terms and subject to the conditions set forth in the Award Agreement and the Plan. 2. EXERCISE OF OPTION The Option shall continue to vest, in accordance with the Vesting Schedule set forth on the Term Sheet, so long as Participant remains in Continuous Service with the Company. Participant may exercise any vested portion of the Option at any time prior to the Expiration Date of the Option, except as otherwise provided in the Plan. For the avoidance of doubt, nothing in this Award Agreement shall prevent the Committee from, in its sole discretion, approving the accelerated vesting of this Award in connection with a Change in Control. To exercise the Option (or any part thereof), Participant shall provide notice to the Company specifying the number of Shares Participant wishes to purchase and how Participant’s Shares should be registered (in Participant’s name only or in Participant’s and Participant’s spouse’s names as community property or as joint tenants with right of survivorship). The exercise price (the “Exercise Price”) of the Option is set forth in the Term Sheet. The Company shall not be obligated to issue any Shares until Participant has paid the total Exercise Price for that number of Shares. The Exercise Price may be paid by one or more of the following means: (i) by cash or check payable to the Company; (ii) if permitted by the Committee in its sole discretion, by delivery to the Company of already-owned Shares having a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the Shares as to which the Option is being exercised; (iii) if permitted by the Committee in its sole discretion, by a “net exercise” arrangement whereby Participant surrenders to the Company Shares otherwise receivable upon exercise of the Option (e.g., the Company will reduce the number of Shares issued upon exercise of the Option by the largest whole number of Shares with a Fair Market Value that does not exceed the aggregate Exercise Price); (iv) by a cashless exercise program that the Committee may approve, from time to time in its discretion, pursuant to which a Participant may elect to concurrently provide irrevocable instructions (A) to Participant’s broker or dealer to effect the immediate sale of the purchased Shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the Exercise Price of the Option plus all applicable withholding taxes, and (B) to the Company to deliver the certificates for the purchased Shares directly to the broker or dealer in order to complete the sale; or (v) if permitted by the Committee in its sole discretion, in any other form of legal consideration. Fractional Shares will not be issued. Shares will be issued as soon as practical after exercise. Notwithstanding the above, the Company shall not be obligated to deliver any Shares during any period when the Company determines that the exercisability of the Option or the delivery of Shares hereunder would violate Applicable Law. 3. EXPIRATION OF OPTION The Option shall expire and cease to be exercisable on the Expiration Date set forth in the Term Sheet. 4. RESTRICTIONS ON RESALES OF OPTION SHARES The Company may impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by Participant or other subsequent transfers by Participant of any Shares issued as a result of the exercise of the Option, including without limitation (a) restrictions under an insider trading policy, (b) restrictions designed to delay and/or coordinate the timing and manner of sales by Participant and other optionholders, (c) restrictions as to the use of a specified brokerage firm for such resales or other transfers or (d) restrictions under Applicable Law. 5. INCOME TAXES Participant shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise by reason of an Option exercise or disposition of Shares issued as a result of an Option exercise. The Company shall not be required to issue Shares or to recognize the disposition of such Shares until such obligations are satisfied. 6. TRANSFERABILITY OF OPTION Except as required by Applicable Law, the Option shall not be assignable, alienable, saleable, or transferable by Participant except by will or by the laws of descent and distribution provided, however, that Participant may, in the manner established by the Committee, designate a beneficiary or beneficiaries to exercise the rights of Participant with respect to the Option on the death of Participant. The Option shall be exercisable, during Participant’s lifetime, only by Participant or, if permissible under Applicable Law, by Participant’s guardian or legal representative. The Option may not be pledged, alienated, attached, or otherwise encumbered, and any purported pledge, alienation, attachment, or encumbrance thereof shall be void and unenforceable against the Company. Notwithstanding the foregoing, the Participant may transfer some or all of his or her Options to one or more “family members,” which is not a “prohibited transfer for value,” provided that (i) the Participant (or such Participant’s estate or representative) shall remain obligated to satisfy all income or other tax withholding obligations associated with the exercise of such Option; (ii) the Participant shall notify the Company in writing that such transfer has occurred and disclose to the Company the name and address of the “family member” or “family members” and their relationship to Participant, and (iii) such transfer shall be effected pursuant to transfer documents in a form approved by the Committee. For purposes of the foregoing, the terms “family members” and “prohibited transfer for value” have the meaning ascribed to them in the General Instructions to form S-8 (or any successor form) promulgated under the Securities Act of 1933, as amended. 7. REPRESENTATIONS AND WARRANTIES Participant acknowledges that Applicable Law may require the placement of certain restrictive legends upon the Shares issued upon exercise of the Option, and Participant hereby consents to the placing of any such legends upon certificates evidencing the Shares as the Company may deem necessary or advisable. Participant acknowledges that he or she shall be solely responsible for the satisfaction of any taxes or interest or other consequence, that may arise pursuant to the Option (including taxes arising under Code Section 409A of the Code), and neither the Company nor the Committee nor anyone other than Participant, or his or her estate or beneficiaries, shall have any obligation whatsoever to pay such taxes or interest or to otherwise indemnify or hold Participant harmless from any or all of such taxes. Notwithstanding any other provision of the Plan or this Agreement, if the Participant is subject to Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), then the Plan, the Award and this Award Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by Applicable Law, this Award Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule. 8. THE PLAN AND OTHER AGREEMENTS In addition to the Award Agreement, the Option shall be subject to the terms of the Plan, which are incorporated into the Award Agreement by this reference. A copy of the Plan, and the accompanying prospectus, is available at the Company’s intranet site. The Award Agreement and the Plan constitute the entire understanding between Participant and the Company regarding the Option. Any prior agreements, commitments or negotiations concerning the Option are superseded. 9. LIMITATION OF INTEREST IN SHARES SUBJECT TO OPTION Neither Participant (individually or as a member of a group) nor any beneficiary or other person claiming under or through Participant shall have any right, title, interest, or privilege in or to any Shares allocated or reserved for the purpose of the Plan or subject to the Award Agreement except as to such Shares, if any, as shall have been issued to such person upon exercise of the Option. 10. NO EMPLOYMENT RIGHT Nothing in the Plan, in the Award Agreement or any other instrument executed pursuant to the Plan shall confer upon Participant any right to continue in the Company’s employ or service nor limit in any way the Company’s right to terminate Participant’s Continuous Service at any time for any reason. 11. GENERAL In the event that any provision of the Award Agreement is declared to be illegal, invalid or otherwise unenforceable by a court of competent jurisdiction, such provision shall be reformed, if possible, to the extent necessary to render it legal, valid and enforceable, or otherwise deleted, and the remainder of the Award Agreement shall not be affected except to the extent necessary to reform or delete such illegal, invalid or unenforceable provision. Section headings are inserted solely for convenience of reference, and shall not constitute a part of the Award Agreement, nor shall they affect its meaning, construction or effect. Except as otherwise provided in the Award Agreement or in the Plan, every covenant, term, and provision of the Award Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legatees, legal representatives, successors, transferees, and assigns. The Award Agreement may be modified or amended at any time, in accordance with the Plan and provided that Participant must consent in writing to any modification that would impair his or her rights under the Award Agreement provided that no such consent shall be required with respect to any modification if the Committee determines in its sole discretion that such modification either (i) is required or advisable in order for the Company, the Plan or the Option to satisfy or conform to Applicable Law or to meet the requirements of any accounting standard, or (ii) is not reasonably likely to significantly diminish the benefits provided under such Option. 12. “MARKET STAND-OFF” CONDITIONS Participant agrees that, if requested by the Company, Participant will not sell or otherwise transfer or dispose of any Shares held by Participant without the prior written consent of the Company during such period of time. 13. INTERPRETATION This Option is granted pursuant to the terms of the Plan, and shall in all respects be interpreted in accordance therewith. The Committee shall have the power to interpret the Plan and the Award Agreement and to adopt such rules for the administration, interpretation and application of the Plan and the Award Agreement as are consistent therewith and to interpret or revoke any such rules. Any action, decision, interpretation or determination by the Committee shall be final, binding and conclusive on the Company and Participant. No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, the Award Agreement, or the Option. 14. NOTICES Any notice, demand or request required or permitted to be given under the Award Agreement shall be in writing and shall be deemed given when delivered personally or three (3) days after being deposited in the United States mail, as certified or registered mail, with postage prepaid, and addressed, if to the Company, at its principal place of business, Attention: Legal Department, and if to Participant, at his or her most recent address as shown in the employment or stock records of the Company. 15. GOVERNING LAW The validity, construction, interpretation, and effect of this Option shall be governed by and determined in accordance with the laws of the State of Delaware, regardless of the law that might be applied under principles of conflicts of laws. 16. COUNTERSIGNATURE The Term Sheet may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall be deemed one instrument, and is incorporated herein. SPECTRUM PHARMACEUTICALS, INC. TERM SHEET FOR 2018 LONG-TERM INCENTIVE PLAN RESTRICTED STOCK UNIT AWARD Spectrum Pharmaceuticals, Inc. (the “Company”) hereby grants to the Participant named below Restricted Stock Units (the “RSUs”) covering the number of Shares specified below (the “Award”), under the Spectrum Pharmaceuticals, Inc. 2018 Long-Term Incentive Plan (the “Plan”). This Award is governed by the terms and subject to the conditions set forth in this Term Sheet, the Plan and the Plan’s Standard Terms and Conditions (the “Standard Terms and Conditions”), each as amended from time to time (the Term Sheet and the Standard Terms and Conditions, as in effect at the time of the execution of the Term Sheet, together constituting the “Award Agreement” between the Participant and the Company). This Award is granted pursuant to the Plan and is subject to and qualified in its entirety by the Award Agreement. If the Award Agreement conflicts with the Plan, the Plan will control. Capitalized terms not explicitly defined herein are defined in the Plan. Name of Participant: #ParticipantName# Grant Date: #GrantDate# Number of RSUs: #QuantityGranted# Vesting Commencement Date: ☐ Same as Grant Date ☐ Date: _ #GrantDate#_ Vesting/Issuance Schedule: One Share will be issued for each vested RSU. The RSUs shall vest as follows: #VestingDateandQuantity# By accepting this Term Sheet, Participant acknowledges that he or she has received and read, and agrees that this Award shall be subject to, the terms of the Award Agreement and the Plan. IN WITNESS WHEREOF, the Company has caused this Restricted Stock Unit Award to be executed by its duly authorized officer. SPECTRUM PHARMACEUTICALS, INC. Thomas J. Riga CEO & President [Participant Signature page follows on the reverse side of this Term Sheet] PARTICIPANT’S ACCEPTANCE The undersigned hereby accepts the foregoing Restricted Stock Unit Award and agrees to the terms and conditions of the Award Agreement and the Plan. The undersigned hereby acknowledges receipt of the attached Standard Terms and Conditions and that a copy of the Plan is available on the Company’s intranet. PARTICIPANT ___#Signature#__________ Signature SPECTRUM PHARMACEUTICALS, INC. STANDARD TERMS AND CONDITIONS FOR RESTRICTED STOCK UNIT AWARDS These Standard Terms and Conditions apply to any Restricted Stock Units (“RSUs”) granted under the Spectrum Pharmaceuticals, Inc. 2018 Long-Term Incentive Plan (the “Plan”) that are evidenced by a Term Sheet or an action of the Committee that specifically refers to these Standard Terms and Conditions (the Term Sheet and the Standard Terms and Conditions, as in effect at the time of the execution of the Term Sheet, together constituting the “Award Agreement” between Participant and the Company) (the “Award”). Capitalized terms not otherwise defined herein shall have the meaning set forth in the Plan. 1. TERMS OF RSUS In consideration of Participant’s agreement to commence employment with and remain in the employ of the Company or any Affiliate, the Company has granted to the Participant named in the Term Sheet provided to Participant herewith the number of RSUs set forth in the Term Sheet. The Award represents the right to be issued, on a future date, the number of Shares that is equal to the number of RSUs indicated in the Term Sheet, subject to Participant’s satisfaction of the vesting conditions set forth therein. 2. VESTING OF RSUs The RSUs shall vest, in accordance with the Vesting Schedule set forth in the Term Sheet, so long as Participant remains in Continuous Service with the Company. Unless otherwise determined by the Committee or set forth in a written agreement between Participant and the Company, in the event that Participant’s Continuous Service terminates for any reason, any portion of the RSUs that are unvested as of such termination date shall remain unvested and shall be immediately forfeited without any further action by the Company or the Participant. For the avoidance of doubt, nothing in this Award Agreement shall prevent the Committee from, in its sole discretion, approving the accelerated vesting of this Award in connection with a Change in Control. On or as soon as administratively practicable (and within thirty (30) days) following the date on which a portion of the RSUs covered by the Award Agreement vests (each, a “Vesting Date”), the Company will deliver to the Participant a number of Shares (either by delivering one or more certificates for such Shares or by entering such Shares in book entry form, as determined by the Company in its discretion) equal to the number of RSUs subject to the Award Agreement that vest on the applicable Vesting Date, subject to the satisfaction of any applicable tax withholding obligations; provided, however, that if, at the time of proposed settlement, the Participant is restricted from transacting in Shares due to Company policy, settlement shall be delayed until the Participant is no longer restricted from transacting in Shares or, if earlier, March 15 of the year following the year in which the Vesting Date occurred. No fractional RSUs or rights for fractional Shares shall be created pursuant to the Award Agreement. 2. NO RIGHTS AS A STOCKHOLDER Until Shares are issued to Participant, Participant shall have no rights as a stockholder, including, but not limited to, the right to vote the Shares underlying the RSUs and the right to receive dividends or other distributions paid or made with respect to Shares. Participant shall receive no benefit or adjustment to the Award with respect to any cash dividend, stock dividend or other distribution unless the Committee makes an adjustment to the Award as provided in the Plan; provided, however, that this sentence shall not apply with respect to any Shares that are delivered to the Participant pursuant to the Award after such Shares have been delivered. 3. RESTRICTIONS ON RESALES OF AWARD SHARES The Company may impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by Participant or other subsequent transfers by Participant of any Shares issued as a result of the vesting of RSUs awarded pursuant to the Award Agreement, including without limitation (a) restrictions under an insider trading policy, (b) restrictions designed to delay and/or coordinate the timing and manner of sales by the Participant and other stockholders, (c) restrictions as to the use of a specified brokerage firm for such resales or other transfers or (d) restrictions under Applicable Law. 4. INCOME TAXES Participant (and not the Company) shall be responsible for Participant’s own tax liability that may arise as a result of the acquisition of the Shares underlying the Award. Participant shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise by reason of the vesting of RSUs or disposition of any Shares issued as a result of the vesting of RSUs. The Company shall not be required to issue Shares or to recognize the disposition of such Shares until such obligations are satisfied, and if such obligations are not satisfied by the earlier of (a) the date required by the Board or (b) March 15 of the year following the year in which vesting of such underlying Shares occurred, all such rights with respect to such RSUs and underlying Shares shall be forfeited without compensation. Participant may elect to satisfy any tax withholding obligation (a) in cash, (b) with the consent of the Committee, by requesting that the Company withhold a net number of vested Shares otherwise issuable pursuant to the RSUs having a then current Fair Market Value not exceeding the amount necessary to satisfy the tax withholding obligation of the Company based on the minimum applicable statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes, or (c) through the delivery of a notice that Participant has placed a market sell order with a broker acceptable to the Company with respect to the Shares issuable pursuant to the RSUs then vesting and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the tax withholding obligation; provided that payment of such proceeds is then made to the Company at such time as may be required by the Committee, but in any event not later than the settlement of such sale. Unless Participant elects to satisfy the tax withholding obligation by one of the means described in clauses (a) or (c) above, or any other method permitted by the Plan, the Company has the right and option, but not the obligation, to treat Participant’s failure to provide timely payment in accordance with the Plan of any withholding tax arising in connection with the RSUs as Participant’s election to satisfy all or any portion of the withholding tax by requesting the Company retain Shares otherwise issuable under the Award based on the minimum applicable statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes. 5. TRANSFERABILITY OF RSUs Except as required by Applicable Law, the RSUs shall not be assignable, alienable, saleable, or transferable by Participant except by will or by the laws of descent and distribution provided, however, that Participant may, in the manner established by the Committee, designate a beneficiary or beneficiaries to exercise the rights of Participant with respect to the RSUs on the death of Participant. The RSUs may not be pledged, alienated, attached, or otherwise encumbered, and any purported pledge, alienation, attachment, or encumbrance thereof shall be void and unenforceable against the Company. Notwithstanding the foregoing, Participant may transfer some or all of the RSUs to one or more “family members,” which is not a “prohibited transfer for value,” provided that (a) the Participant (or such Participant’s estate or representative) shall remain obligated to satisfy all income or other tax withholding obligations associated with the RSUs; (b) the Participant shall notify the Company in writing that such transfer has occurred and disclose to the Company the name and address of the “family member” or “family members” and their relationship to Participant, and (c) such transfer shall be effected pursuant to transfer documents in a form approved by the Committee. For purposes of the foregoing, the terms “family members” and “prohibited transfer for value” have the meaning ascribed to them in the General Instructions to form S-8 (or any successor form) promulgated under the Securities Act of 1933, as amended (the “Securities Act”). 6. REPRESENTATIONS AND WARRANTIES Participant acknowledges that Applicable Law may require the placement of certain restrictive legends upon the Shares issued upon vesting of RSUs, and Participant hereby consents to the placing of any such legends upon certificates evidencing the Shares as the Company may deem necessary or advisable. Participant acknowledges that he or she shall be solely responsible for the satisfaction of any taxes or interest or other consequence that may arise pursuant to the RSUs (including taxes arising under Section 409A (as defined below)), and neither the Company nor the Committee nor anyone other than Participant, or his or her estate or beneficiaries, shall have any obligation whatsoever to pay such taxes or interest or to otherwise indemnify or hold Participant harmless from any or all of such taxes. Notwithstanding any other provision of the Plan or this Award Agreement, if the Participant is subject to Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), then the Plan, the Award and this Award Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by Applicable Law, this Award Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule. 7. THE PLAN AND OTHER AGREEMENTS In addition to the Award Agreement, the Award shall be subject to the terms of the Plan, which are incorporated into the Award Agreement by this reference. A copy of the Plan, and the accompanying prospectus is available at the Company’s intranet site. The Award Agreement and the Plan constitute the entire understanding between Participant and the Company regarding the Award. Any prior agreements, commitments or negotiations concerning the Award are superseded. 8. NO EMPLOYMENT RIGHT Nothing in the Plan, in the Award Agreement or any other instrument executed pursuant to the Plan shall confer upon Participant any right to continue in the Company’s employ nor limit in any way the Company’s right to terminate Participant’s Continuous Service at any time for any reason. 9. GENERAL In the event that any provision of the Award Agreement is declared to be illegal, invalid or otherwise unenforceable by a court of competent jurisdiction, such provision shall be reformed, if possible, to the extent necessary to render it legal, valid and enforceable, or otherwise deleted, and the remainder of the Award Agreement shall not be affected except to the extent necessary to reform or delete such illegal, invalid or unenforceable provision. Section headings are inserted solely for convenience of reference, and shall not constitute a part of the Award Agreement, nor shall they affect its meaning, construction or effect. Except as otherwise provided in the Award Agreement or in the Plan, every covenant, term, and provision of the Award Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legatees, legal representatives, successors, transferees, and assigns. The Award Agreement may be modified or amended at any time, in accordance with the Plan and provided that Participant must consent in writing to any modification that would impair his or her rights under the Award Agreement provided that no such consent shall be required with respect to any modification if the Committee determines in its sole discretion that such modification either (a) is required or advisable in order for the Company, the Plan or the Award to satisfy or conform to Applicable Law or to meet the requirements of any accounting standard, or (b) is not reasonably likely to significantly diminish the benefits provided under such Award. 10. “MARKET STAND-OFF” CONDITIONS Participant agrees that, if requested by the Company, Participant will not sell or otherwise transfer or dispose of any Shares issued to Participant pursuant to the Award without the prior written consent of the Company during such period of time. 11. INTERPRETATION This Award is granted pursuant to the terms of the Plan, and shall in all respects be interpreted in accordance therewith. The Committee shall have the power to interpret the Plan and the Award Agreement and to adopt such rules for the administration, interpretation and application of the Plan and the Award Agreement as are consistent therewith and to interpret or revoke any such rules. Any action, decision, interpretation or determination by the Committee shall be final, binding and conclusive on the Company and Participant. No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, the Award Agreement, or the Award. 12. NOTICES Any notice, demand or request required or permitted to be given under the Award Agreement shall be in writing and shall be deemed given when delivered personally or three (3) days after being deposited in the United States mail, as certified or registered mail, with postage prepaid, and addressed, if to the Company, at its principal place of business, Attention: Legal Department, and if to Participant, at his or her most recent address as shown in the employment or stock records of the Company. 13. GOVERNING LAW The validity, construction, interpretation, and effect of this Award shall be governed by and determined in accordance with the laws of the State of Delaware, regardless of the law that might be applied under principles of conflicts of laws. 14. COUNTERSIGNATURE The Term Sheet may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall be deemed one instrument, and is incorporated herein. 15. Section 409A Notwithstanding any other provision of the Plan or the Award Agreement, the Plan and the Award Agreement shall be interpreted in accordance with, and incorporate the terms and conditions required by, Section 409A of the Code (together with any Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Grant Date, “Section 409A”). The Committee may, in its discretion, adopt such amendments to the Plan or the Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Committee determines are necessary or appropriate to comply with the requirements of Section 409A. This Award is not intended to provide for any deferral of compensation subject to Section 409A, and, accordingly, the Shares issuable pursuant to the RSUs hereunder shall be distributed to Participant no later than the later of: (a) the fifteenth (15th) day of the third month following Participant’s first taxable year in which such RSUs are no longer subject to a substantial risk of forfeiture, and (b) the fifteenth (15th) day of the third month following the first taxable year of the Company in which such RSUs are no longer subject to substantial risk of forfeiture, as determined in accordance with Section 409A and any Treasury Regulations and other guidance issued thereunder. Execution Version [***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded information is not material and the registrant customarily and actually treats as private and confidential. LICENSE, DEVELOPMENT AND SUPPLY AGREEMENT This License, Development and Supply Agreement (the “Agreement”) is entered into as of October 8, 2014 (the “Effective Date”) by and between Spectrum Pharmaceuticals inc., a Delaware corporation (“Spectrum”) and Hanmi Pharmaceuticals Co., Ltd., a company incorporated under the laws of the Republic of Korea (“Hanmi”). Recitals Whereas, Hanmi has developed a compound known as LAPS-GCSF (HM10460A) by applying its proprietary long acting protein/peptide discovery platform technology to the GCSF analog; Whereas, pursuant to that certain License Option and Research Collaboration Agreement, dated January 31, 2012, Hanmi has granted Spectrum an option to acquire an exclusive license under Hanmi’s intellectual property rights to make, have made, export, import, use and sell the LAPS-GCSF for all uses in human beings; Whereas, Spectrum has exercised the option and desires to obtain from Hanmi, and Hanmi desires to grant to Spectrum, an exclusive license under the Licensed Technology to develop and commercialize Products in the Field in the Spectrum Territory (each as defined below), subject to the terms and conditions of this Agreement. Now, Therefore, in consideration of the foregoing premises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Hanmi and Spectrum hereby agree as follows: 1. Definitions. 1.1 “Affiliate” shall mean any company or entity who is controlled by, controlling, or under common control with a Party. For the purpose of this definition, an entity shall be deemed to “control” another entity, if it owns directly or indirectly, more than 50% of the outstanding voting securities, capital stock, or other comparable equity or ownership interest of such entity, or exercises equivalent influence over such entity. 1.2 “Annual Net Sales” shall mean, with respect to a particular calendar year, all Net Sales of the Products for use in the Field in the Spectrum Territory during such calendar year. 1.3 “Applicable Laws” shall mean the applicable provisions of any and all national, supranational, regional, state and local laws, treaties, statutes, rules, regulations, administrative codes, guidance, ordinances, judgments, decrees, directives, injunctions, orders, permits (including Marketing Approval) of or from any court, arbitrator, Regulatory Authority or governmental agency or authority having jurisdiction over or related to the subject item or subject person. 1.4 “Bankruptcy Laws” shall have the meaning provided in Section 9.4. 1.5 “Binding Sales Forecast” has the meaning set forth in Section 6 on Exhibit 3.4(c). 1.6 “Biosimilar Product” shall mean a drug product containing the Compound that is in the same dosage form, strength, route of administration, quality and performance characteristics or intended use as the Product. 1.7 “BLA” shall mean a biologics license application filed with the FDA as more fully defined in 21 C.F.R. §600 - 680 or similar application or submission filed with or submitted to any Regulatory Authority to obtain permission to commence marketing and sales of a product in any particular jurisdiction in the Territory. 1.8 “Business Day” shall mean any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by the Applicable Laws to close in the U.S. or Korea. 1.9 “Certificate of Analysis” shall mean a certificate issued by Hanmi or its Third Party manufacturer that provides the required tests and test methods to be performed prior to each shipment of the Products in accordance with the approved Product Specifications and reports the results and evaluation of compliance of those results with the approved Product Specifications. 1.10 “Certificate of Compliance” shall mean a certificate certifying that each lot of Products shipped by Hanmi to Spectrum is manufactured in accordance with the cGMPs and conforms to the Product Specifications when tested according to the applicable analytical methods. 1.11 “cGMP” means current good manufacturing practices as provided for (and as amended from time to time) in European Community Directive 91/356/EEC (Principles and guidelines of good manufacturing practice for medicinal products), Current Good Manufacturing Practice Regulations of the U.S. Code of Federal Regulations Title 21 (21 CFR §§ 210 and 211) or any equivalent laws in other countries in relation to the production of biologics. 1.12 “COG” means Hanmi’s fully burdened costs to Produce the Product, including without limitation, the fully burdened costs for acquiring materials, manufacturing, testing and analysis, labeling and packaging, and all related direct labor and benefits and allocable portion of overhead directly related thereto (without allocation for underutilized facilities), all determined in accordance with the generally accepted accounting principles in the Republic of Korea of the International Financial Reporting Standards, as applicable. 1.13 “Commercial Launch” shall mean (i) with respect to any Product, the first sale by Spectrum, its Affiliate or Sublicensee to any Third Party including distributor of such Product in a country in the Spectrum Territory after the governing Regulatory Authority of such country has granted Marketing Approvals of such Product, and (ii) with respect to a Biosimilar Product, the first sale by any Third Party including distributor of such Biosimilar Product in a country in the Spectrum Territory after the governing Regulatory Authority of such country has granted Marketing Approvals of such Biosimilar Product. For the avoidance of doubt, any sale of a Product or a Biosimilar Product for compassionate use, named patient use, clinical trial purposes or other similar uses will not constitute a Commercial Launch. 1.14 “Commercially Reasonable Efforts” shall mean reasonable and good faith efforts by a Party to accomplish an objective as that Party would normally use to accomplish a similar objective under similar circumstances, it being understood and agreed that, with respect to the conduct of the development or commercialization of a Compound or Product, such efforts shall be that level of efforts and resources consistent with commercially reasonable practices of a similarly situated specialty pharmaceutical company to perform any activity for a compound or product at a similar stage of research, development or commercialization, taking into account measures of patent coverage, relative safety and efficacy, product profile, the competitiveness of the marketplace, the proprietary position of such compound or product, the regulatory structure involved, the market potential of such compound or product, industrial standard in manufacturing and supplying pharmaceutical products and its components, and other relevant factors, including comparative technical, legal, scientific, and/or medical factors. 1.15 “Competing Activities” has the meaning set forth in Section 2.2. 1.16 “Competing Product” shall mean any pharmaceutical formulation that competes with the Products in the field of chemotherapy induced or infection related neutropenia. 1.17 “Compound” shall mean the long-acting granulocyte colony stimulating factor known as LAPS-GCSF, and all its improvements or its derivative forms thereof. 2. 1.18 “Confidential Information” shall mean all Information and other proprietary scientific, marketing, financial or commercial information or data, which is generated by or on behalf of a Party or its Affiliates and which one Party or any of its Affiliates or sublicensees (including Sublicensees) has furnished or made available to the other Party or its Affiliates, whether in oral, written, or electronic form. 1.19 “Control” (including any variations such as “Controlled” and “Controlling”) shall mean, with respect to any Information, Patents or other intellectual property rights, possession by a Party of the right, power and authority (whether by ownership, license or otherwise, other than by virtue of any rights granted under this Agreement) to grant access to, to grant use of, or to grant a license or a sublicense to such Information, Patents or intellectual property rights without violating the terms of any agreement or other arrangement with any Third Party. 1.20 “Developed” has the meaning set forth in Section 8.1(d). 1.21 “Developed Competing Product” has the meaning set forth in Section 2.3. 1.22 “Disclosing Party” shall have the meaning provided in Section 6.1. 1.23 “Drug Master File” or “DMF” shall mean with respect to the Compound or Products a submission to the Regulatory Authority that may be used to provide confidential detailed information about facilities, processes, or articles used in the manufacturing, processing, packaging, and storing of one or more human drugs to support regulatory filings including but not limited to an IND, BLA, an export application, or amendments and supplements to any of these. 1.24 “Excepted Development Matters” has the meaning set forth in Section 3.1(d). 1.25 “Exercise Period” has the meaning set forth in Section 2.3. 1.26 “FDA” shall mean the U.S. Food and Drug Administration and any successor entity thereto. 1.27 “FD&C Act” means the U.S. Federal Food, Drug and Cosmetic Act, as amended. 1.28 “Field” shall mean all uses. 1.29 “Force Majeure Event” has the meaning set forth in Section 11.1. 1.30 “Forecast” has the meaning set forth in Section 6 on Exhibit 3.4(c). 1.31 “Hanmi Improved Technology” has the meaning set forth in Section 8.1(b). 1.32 “Hanmi License” has the meaning set forth in Section 8.1(b). 1.33 “Hanmi Territory” shall mean Republic of Korea, People’s Republic of China, and Japan. 1.34 “Improved Technology” has the meaning set forth in Section 8.1(b). 1.35 “IND” shall mean an investigational new drug application, clinical study application, clinical trial exemption, or similar application or submission for approval to conduct human clinical investigations filed with or submitted to a Regulatory Authority in conformance with the requirements of such Regulatory Authority including any such application filed with the FDA pursuant to 21 CFR Part 312. 1.36 “Indemnified Party” shall have the meaning provided in Section 10.3. 1.37 “Indemnifying Party” shall have the meaning provided in Section 10.3. 3. 1.38 “Information” shall mean tangible and intangible techniques, technology, practices, trade secrets, inventions (whether patentable or not), processes, formulations, compounds, products, biological materials, cell lines (it being understood that any rights to use “Information” include the rights to use such cell lines), samples of assay components, media, designs, formulas, ideas, programs, software models, algorithms, developments, experimental works, protocols, methods, knowledge, know-how, skill, experience, test data and results (including pharmacological, toxicological and non- clinical and clinical data and results), compilations of data, other works of analytical and quality control data, results, descriptions, compositions of matter, regulatory submissions, minutes, correspondence and strategy. 1.39 “Initiation” shall mean the first dosing of a human subject in the Phase III Clinical Trial. 1.40 “Inspection Period” has the meaning set forth in Section 3.4(b)(v). 1.41 “JDC” shall have the meaning provided in Section 3.3(a). 1.42 “Joint Improved Technology” has the meaning set forth in Section 8.1(c). 1.43 “Latent Defect” has the meaning set forth in Section 3.4(b)(v). 1.44 “Latent Defect Inspection Period” has the meaning set forth in Section 3.4(b)(v). 1.45 “Latent Defect Report” has the meaning set forth in Section 3.4(b)(v). 1.46 “License” shall have the meaning provided in Section 2.1(b). 1.47 “Licensed Know-How” shall mean all Information with respect to any Compound and/or Product, which Information is Controlled by Hanmi as of the Effective Date or by Hanmi or any Hanmi Affiliate during the Term and is necessary or useful for (a) the practice of the Licensed Patents, (b) preparing and prosecuting IND, BLA for Product in the Field in each country in the Spectrum Territory, (c) the research, development, manufacture or use of any Compound and/or Product in the Field anywhere in the world solely for marketing and sale of the Products in the Spectrum Territory, or (d) for the marketing and sale of the Products in the Spectrum Territory. 1.48 “Licensed Patents” shall mean (a) all Patents set forth on Exhibit 1.48, and (b) all other Patents Controlled by Hanmi or any Hanmi Affiliate during the Term, which (i) claim the composition of matter, manufacture or use in the Field of any Compound and/or Products, or (ii) in the absence of a license, would be infringed by the research, development, manufacture, use, commercialization, marketing, advertisement, promotion, details, distribution import, export, offering for sale and/or sale of any Compound and/or Product in the Field in the Spectrum Territory. 1.49 “Licensed Technology” shall mean the Licensed Know-How, Licensed Patents, Hanmi Improved Technology and Hanmi’s interest in Joint Improved Technology. 1.50 “Loss” shall have the meaning provided in Section 10.1. 1.51 “Major Markets” shall mean the countries set forth on Exhibit 1.51. 1.52 “Marketing Approval” shall mean, with respect to a product in a particular jurisdiction, approval or other permission by the applicable Regulatory Authorities sufficient to initiate marketing and sales of such product. 1.53 “Negotiation Period” has the meaning set forth in Section 2.3. 1.54 “Net Sales” shall mean the gross invoice price of Product sold by Spectrum, its Affiliates or Sublicensees to a Third Party (where such third party is not a related party) in the Spectrum Territory 4. after deducting: (i) all trade, quantity and cash discounts; (ii) returns, rebates, chargebacks and other allowances; and (iii) retroactive price reductions that are actually allowed or granted. For the avoidance of doubt, the gross invoice price of Product does not include value added taxes and other similar taxes on Product. Net Sales shall be determined in accordance with U.S. generally accepted accounting principles, applied on a basis consistent with Spectrum’s annual audited financial statements; provided, that the amount invoiced to cover transportation, insurance and custom duties shall also be deducted from gross invoice price to calculate Net Sales. In the event any Product is sold as a part of, or in conjunction with, other products, the Net Sales of such Product shall equal the Net Sales of the Product when sold on a stand-alone basis, as determined above. If the Product is so integrated with other products that it could not be sold on a stand-alone basis, the Net Sales of such Product shall be the Net Sales for the combination including the Product, multiplied by a fraction the numerator of which is the cost of materials for the Product as integrated into such combination and the denominator of which is the cost of materials for the combination as a whole. 1.55 “Neutropenia Trial” has the meaning set forth in Section 3.1(a). 1.56 “Non-Conformity Report” has the meaning set forth in Section 3.4(b)(v). 1.57 “Non-Exclusive License” has the meaning set forth in Section 2.1(b). 1.58 “Option Exercise Fee” has the meaning set forth in Section 4.1. 1.59 “Out-license” has the meaning set forth in Section 2.3. 1.60 “Out-license Notice” has the meaning set forth in Section 2.3. 1.61 “Party” shall mean Spectrum or Hanmi individually, and “Parties” shall mean Spectrum and Hanmi collectively. 1.62 “Patents” shall mean patents and patent applications, including provisional applications, continuations, continuations-in- part, continued prosecution applications, divisions, substitutions, reissues, additions, renewals, reexaminations, extensions, term restorations, confirmations, registrations, revalidations, revisions, priority rights, requests for continued examination and supplementary protection certificates granted in relation thereto, as well as utility models, innovation patents, petty patents, design patents, patents of addition, inventor’s certificates, and equivalents in any country or jurisdiction. 1.63 “Phase III Clinical Trial” shall mean a human clinical trial, the principal purpose of which is to gather safety and efficacy data of one or more particular doses in patients being studied that is needed to evaluate the overall benefit and risk relationship of the product and to provide adequate basis for labeling, as more fully defined in 21 C.F.R. §312.21(c) or comparable regulations in any country or jurisdiction outside the U.S. (and any amended or successor regulations). 1.64 “Product” shall mean any pharmaceutical preparation, composition and formulation that contain the Compound. 1.65 “Product Specifications” shall mean the formulation and dosage strength of a Product and a set of analytical methods and corresponding values and limits for the quality control of the identity, purity, and content of such Product, as mutually agreed by the Parties and attached to the Quality Agreement. Any subsequent change to the Product Specifications that is required by a Regulatory Authority in the Spectrum Territory shall be at the sole cost of Spectrum, and any subsequent change to the Product Specifications that is required by a Regulatory Authority in the Hanmi Territory shall be at the sole cost of Hanmi; provided, however, any change to the Product Specifications in the Territory must be approved by both the Parties in writing, which approval shall not be unreasonably withheld. 1.66 “Quality Agreement” has the meaning set forth in Section 3.4(d). 1.67 “Receiving Party” shall have the meaning provided in Section 6.1. 5. 1.68 “Regulatory Authority” shall mean any country, federal, supranational, state or local regulatory agency, department, bureau or other governmental or regulatory authority having the administrative authority to regulate the development or marketing of pharmaceutical products in any country or other jurisdiction. 1.69 “Regulatory Filing” shall mean any filing or application with any Regulatory Authority, including NDAs and authorization, approvals or clearances arising from the foregoing, including Marketing Approvals, and all correspondence with the FDA or other relevant Regulatory Authority, as well as minutes of any material meetings, telephone conferences or discussions with the FDA or other relevant Regulatory Authority, in each case with respect to a Product. 1.70 “Royalty Term” has the meaning set forth in Section 4.3(b). 1.71 “ROFR Notice” has the meaning set forth in Section 2.3. 1.72 “Rule 144” shall mean Rule 144 as promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the Commission. 1.73 “SEC” shall have the meaning provided in Section 6.4(a). 1.74 “Section 365(n)” has the meaning set forth in Section 9.4. 1.75 “Securities Act” shall mean the Securities Act of 1933, as amended, or any similar successor federal statute and the rules and regulations thereunder, all as the same shall be in effect from time to time. 1.76 “Spectrum Improved Technology” has the meaning set forth in Section 8.1(b). 1.77 “Spectrum Territory” shall mean the entire world other than the Hanmi Territory. 1.78 “Sublicensee” shall mean any entity to whom Spectrum has directly or indirectly granted a sublicense under all or any portion of the License. 1.79 “Supply Agreement” has the meaning set forth in Section 3.4(c). 1.80 “Term” shall have the meaning provided in Section 9.1. 1.81 “Terminated Countries” shall have the meaning provided in Section 9.2(d). 1.82 “Territory” shall mean all of the countries and territories in the world. A Party’s respective “Territory” shall mean, in the case of Hanmi, the Hanmi Territory, and in the case of Spectrum, the Spectrum Territory. 1.83 “Third Party” shall mean any entity other than Spectrum or its Affiliates or Sublicensees, or Hanmi or its Affiliates 1.84 “Third Party Royalties” has the meaning set forth in Section 4.4(a). 1.85 “Third Party Infringement” shall have the meaning provided in Section 8.3(a). 1.86 “U.S.” shall mean the United States of America and its territories and possessions. 1.87 “Valid Claim” shall mean, in a country, a claim of an actually issued and unexpired Patent claiming a composition-of-matter of, or a method of using, the Compound, which claim has not been revoked or held unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction (which decision is not appealable or has not been appealed within the time allowed 6. for appeal), and which claim has not been disclaimed or admitted to be invalid or rendered unenforceable through reissue, re-examination or disclaimer or otherwise. 2. License. 1.1 License Grant to Spectrum. Subject to the terms and conditions of this Agreement, Hanmi hereby grants to Spectrum: (a) an exclusive (even as to Hanmi except as required by Hanmi to perform its obligations under this Agreement) license under the Licensed Technology to research, develop, manufacture, have manufactured, use, have used, market, distribute, import, export, offer for sale, promote, sell and have sold Products in the Field in the Spectrum Territory, (b) upon mutual agreement, a non-exclusive license under the Licensed Technology to, manufacture, have manufactured, the Compound and the Product outside the Spectrum Territory, but solely to, use, have used, market, distribute, offer for sale, promote and sell the Products in the Spectrum Territory (the license granted under this Section 2.1(b), the “Non-Exclusive License,” and collectively with the license granted under Section 2.1(a) above, the “License”); provided, that Spectrum agrees to consult with Hanmi in advance of engaging any Third Party manufacturer in the Hanmi Territory pursuant thereto and each Party agrees to consider in good faith the other Party’s reasonable request with respect to such engagement. (c) the right to grant sublicenses under the License, with the right to grant further sublicenses; provided, however, that such Sublicensee(s) agree to be subject to efforts standards no less stringent than those applicable to Spectrum under this Agreement for the corresponding territory and obligation. 1.2 Non-Compete. During the Term, (a) Hanmi agrees, on its behalf and on behalf of its Affiliates, not to: (i) conduct, participate in or sponsor, directly or indirectly, the commercialization of a Competing Product (collectively, such activities “Competing Activities”) in the Spectrum Territory or (ii) appoint, license or otherwise authorize any Third Party, whether pursuant to such license, appointment, or authorization or otherwise to perform any Competing Activities and (b) Spectrum agrees, on its behalf and on behalf of its Affiliates, not to conduct, participate in or sponsor, the commercialization of any Competing Products in the Spectrum Territory unless (i) Hanmi fails to meet its supply obligations under this Agreement or the Supply Agreement, (ii) there are regulatory impediments for Product approval or maintenance in the Major Markets, or (iii) there are safety issues with the Product or the Compound. The Parties agree that, upon a change of control of Spectrum, the covenants set forth in clause 2.2(b) above shall automatically terminate. 1.3 Development of Competing Product. If Hanmi commences development of a Competing Product during the Term (“Developed Competing Product”), Hanmi agrees to advise Spectrum in writing of such proposed development and keep Spectrum reasonably informed of the results of the material stages of development. In the event that Hanmi decides to appoint, license or otherwise authorize any Third Party to commercialize the Developed Competing Product in Spectrum Territory (“Out-license”), Hanmi must provide Spectrum a written notice of its intention to Out-license (“Out-license Notice”) prior to initiating any discussions with any Third Party regarding such Out-license. For a period of [***] following receipt of the Out-license Notice (“Negotiation Period”), Hanmi agrees to negotiate with Spectrum in good faith the terms of an Out-license to Spectrum. In the event that, at the end of the Negotiation Period, Hanmi and Spectrum fail to agree on the terms of an Out-license to Spectrum, then Hanmi shall be free thereafter to negotiate the terms of the Out- license with Third Parties; provided, that prior to entering into a definitive agreement granting an Out-license to a Third Party, Hanmi must provide Spectrum a written notice of and a copy of the definitive agreement proposed to be entered into with a Third Party (“ROFR Notice”). Spectrum shall have a right of first refusal [***] from the receipt of ROFR Notice (“Exercise Period”) to match the terms of the proposed definitive agreement with the Third Party. If Spectrum fails to match the terms of such proposed Third Party definitive agreement within the Exercise Period, Hanmi shall have [***] from the end of the Exercise Period to execute a definitive agreement with the Third Party. If Hanmi fails to execute such 7. agreement within [***] from the end of the Exercise Period, Hanmi shall again be subject to Spectrum’s right of first negotiation and refusal with respect to such Out-license set forth in this Section 2.3. Spectrum’s right to receive notices, first negotiate and refusal set forth in this Section 2.3 shall survive for a period of the Royalty Term. For avoidance of doubt, Hanmi’s rights to commercialize a Developed Competing Product in the Spectrum Territory are always subject to the Section 2.2 during the Term. 1.4 Territorial Integrity. (a) Commercial Activities. Each Party shall use Commercially Reasonable Efforts to prevent any Product sold or otherwise distributed by such Party, directly or indirectly, from being sold, distributed, or otherwise transported for use outside its respective Territory. Each Party agrees, on behalf of itself and its Affiliates and Sublicensees, not to sell or distribute the Products to any Third Party if such Party or its relevant Affiliate or Sublicensee knows, or has reason to believe, that such Products sold or distributed to such Third Party would be used, or sold or redistributed, directly or indirectly, for use outside its respective Territory. Each Party shall promptly notify, and shall cause its Affiliates and Sublicensees to promptly notify, the other Party in the event it or its Affiliate has reason to believe that any Products sold or distributed to a Third Party has been or will be used outside its respective Territory. (b) Development Activities. Neither Party may conduct research and development on the Compound or the Product in the other Party’s territory, without such Party’s written consent. 1.5 No Implied Licenses; Retained Rights. No right or license under any Patents or Information of either Party is granted or shall be granted by implication. All such rights or licenses are or shall be granted only as expressly provided in the terms of this Agreement. 3. Development, Regulatory and Commercialization Matters. 1.1 Development. (a) Conduct of Development Activities. Each Party shall take the lead in, and be responsible for, conducting the development activities, including clinical trials, as may be reasonably necessary to expeditiously obtain Marketing Approvals for the Products for use in the Field, in the case of Hanmi, in the Hanmi Territory, and in the case of Spectrum, in the Spectrum Territory; provided, however, Spectrum shall have the sole right and be responsible for conducting the Phase III Clinical Trials for treatment of neutropenia (“Neutropenia Trial”), and Spectrum will keep Hanmi reasonably informed of the progress of the Neutropenia Trial, and consider in good faith the requests and suggestions of Hanmi with respect to such trial or a bridging study. It is understood and agreed that, as between the Parties, except as expressly agreed to otherwise by the Parties, all development efforts for the Products for use in the Field (including preparing and filing for Marketing Approvals for the Products for use in the Field), in the case of Spectrum, in the Spectrum Territory, shall be at the sole expense of Spectrum, and in the case of Hanmi, in the Hanmi Territory, shall be at the sole expense of Hanmi. (b) Clinical Trials. To the extent the Parties conduct clinical trials in their respective Territory, the Parties shall coordinate their respective development and regulatory efforts to the extent reasonably practicable. During the course of the clinical study, each Party shall: (i) maintain records in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes and as will properly reflect all work done and results achieved in the performance of the clinical study (including all data in the form required to be maintained under any applicable governmental regulations). Such records shall include books, records, reports, research notes, case report forms, charts, graphs, comments, computations, analyses, recordings, photographs, computer programs and documentation thereof, computer information storage means, samples of materials and other graphic or written data generated in connection with the clinical study; and 8. (ii) promptly provide to the other Party copies of correspondence with regulatory authorities and results of the clinical study and upon request copies of the clinical study-related records and IRB approvals. (c) Protocols and Clinical Trials. Each Party shall provide the other Party, through the JDC, a reasonable opportunity to review and comment upon the draft protocol for each of the material non-clinical studies (to the extent data therefrom is necessary or intended to be used for preparing or filing for Marketing Approval with Regulatory Authorities) and clinical trials to be conducted in the Hanmi Territory or in the Spectrum Territory, as applicable, related to the Products for use in the Field and a summary of any material modification of such protocols from time to time. Except as may be provided in Section 3.1(d) below, Spectrum shall have the right to determine and finalize, in its sole discretion, the protocols for such non-clinical studies and clinical trials to be conducted by Spectrum (itself or through one or more of its Affiliates or Sublicensees) in the Spectrum Territory; and Hanmi shall have the right to determine and finalize, in its sole discretion, the protocols for such non-clinical studies and clinical trials to be conducted by Hanmi (itself or through one or more of its Affiliates) in the Hanmi Territory. The Parties acknowledge the protocols as provided may need to change as a result of exigent or other circumstances (e.g., patient safety matters) and in such case, each Party shall have the right to make such changes without having to provide them beforehand to the other Party for its review and comment hereunder; provided, such changes shall be provided to the other Party as soon as practicable and no later than thirty (30) days prior to such changes being implemented. (d) Excepted Development Matters. If either Party in good faith believes any development activities, as proposed by the other Party and not set forth in Exhibit 3.1(d), would have a likelihood of having a material adverse effect on a Regulatory Filing or the procurement or maintenance of a Marketing Approval of, or on the label or safety of, a Product in clinical development or then being commercialized in such Party’s respective Territory (“Excepted Development Matters”), based on regulatory and scientific evidence typically relied upon by the pharmaceutical industry, then such Party shall notify the other Party of its concerns with respect to such activity within fifteen (15) Business Days of the submission of the draft protocol for such activity and provide documentation of the basis for its concerns. The proposing Party shall, in good faith, consider the documentation and positions of the objecting Party (and, if needed, consult with the objecting Party) to determine whether such activity should be conducted and/or whether the protocol for such activity should be modified to address such concerns. If the proposing Party does not agree with the objecting Party with respect to such Excepted Development Matter, then neither Party shall have any final decision making authority with respect to such activity, and such matter shall be resolved in accordance with Section 11.4. (e) Development Data and Regulatory Filings. Each Party shall, through the JDC, keep the other Party appropriately and routinely informed regarding progress with respect to the development of the Products for use in the Field in such Party’s respective Territory. Each Party shall own, and shall provide the other Party full access to, and sufficient rights to reference and use in its Regulatory Filings for the Products for use in the Field in its respective Territory, without additional charge, all results, data and other information generated from its conduct of activities with respect to the development of the Products, including clinical, non-clinical and CMC reports and regulatory correspondence. 9. 1.2 Regulatory. (a) Conduct of Regulatory Activities. Spectrum (itself, its Affiliates or Sublicensees, as applicable) shall be solely responsible, at its own expense, for all regulatory activities with respect to the Products in the Field in the Spectrum Territory, including formulating regulatory strategy and preparing, filing, obtaining, and maintaining Marketing Approvals for Products in the Field in the Spectrum Territory. Spectrum (itself, its Affiliates or Sublicensees, as applicable) shall be the holder of all Marketing Approvals for Products in the Field in the Spectrum Territory and shall have responsibility for interactions with Regulatory Authorities with respect to the Products in the Field in the Spectrum Territory. Spectrum shall keep Hanmi reasonably informed of, the preparation and Regulatory Authority review and approval of submissions and communications with Regulatory Authorities with respect to the Compound and the Product in the Field in the Spectrum Territory. In addition, upon Hanmi’s reasonable request, Spectrum shall provide Hanmi with copies of all material documents, information and correspondence received from a Regulatory Authority and with copies of any other documents, reports, and communications from or to any Regulatory Authority relating to the Compound, Product and/or activities under this Agreement (b) Access to Regulatory Filings. Hanmi hereby grants to Spectrum (and its Affiliates and Sublicensees, as applicable) the right to access and cross-refer to filings made by Hanmi or its Affiliates, by Hanmi’s licensors or suppliers (who have granted Hanmi cross-reference rights to their filings, which Hanmi will use Commercially Reasonable Efforts to obtain), and by licensees (who have agreed to reciprocal rights of reference for the benefit of Hanmi, which Hanmi will use Commercially Reasonable Efforts to obtain) with Regulatory Authorities and Marketing Approval relating to the Compound and/or the Product (including any DMF) solely to the extent necessary in connection with regulatory activities with respect to the Products in the Field in the Spectrum Territory. Spectrum hereby grants to Hanmi and its Affiliates and licensees (who have agreed to reciprocal rights of reference for the benefit of Spectrum, which Spectrum will use Commercially Reasonable Efforts to obtain) the right to access and cross-refer to filings made by Spectrum and its Affiliates and Sublicensees and by Spectrum’s licensors or suppliers (who have granted Spectrum cross-reference rights to their filings, which Spectrum will use Commercially Reasonable Efforts to obtain), with Regulatory Authorities and Marketing Approval relating to the Products (including any DMF) solely to the extent necessary in connection with regulatory activities with respect to the Products in the Field in the Hanmi Territory. Each Party shall, promptly upon request of the other Party, file with applicable Regulatory Authorities such letters of access or cross-reference as may be necessary to accomplish the intent of this Section 3.2(b). (c) Safety Data Exchange. Before the start of a clinical trial by Spectrum, the Parties shall negotiate in good faith and enter into a safety data exchange agreement regarding the Compound and the Product, which shall set forth standard operating procedures governing the collection, investigation, reporting, and exchange of information concerning adverse drug reactions/experiences sufficient to permit each Party to comply with its regulatory and other legal obligations within the applicable timeframes. Such safety data exchange agreement shall provide that each Party is responsible for the timely reporting of all relevant adverse drug reactions/experiences, Product quality, Product complaints and safety data relating to the Compound and the Product to the appropriate Regulatory Authorities in their respective territories, in accordance with all Applicable Law. Such agreement shall allow each Party to comply with all regulatory and legal requirements regarding the management of safety data by providing for the exchange of relevant information in the appropriate format within applicable timeframes. Unless otherwise mutually agreed by the Parties, Spectrum shall maintain a global safety database for the Compound and the Product and Hanmi shall report all material adverse drug reactions or experiences to Spectrum, as set forth in the safety data exchange agreement, in order to update the database and to comply with Applicable Laws. For the avoidance of doubt, the Party maintaining the global safety database for the Compound and the Product shall, upon reasonable request by the other Party, provide the other Party with safety data contained in the global safety database. (d) Cooperation for Regulatory Activities. Each Party shall cooperate with the other Party for all regulatory activities conducted by such Party hereunder. 1.3 Governance. 10. (a) Joint Development Committee. Within forty-five (45) days of the Effective Date, the Parties will form a joint development committee (the “JDC”) to serve as a forum for information exchange and discussion with respect to development and regulatory activities relating to the Compound and the Product in the Field in the Territory. (b) Composition. The JDC will be comprised of an equal number of members appointed by each of Spectrum and Hanmi, which members shall be employees of the applicable Party with appropriate experience and authority. Each Party will notify the other Party of its initial JDC members within thirty (30) days after the Effective Date. Each Party may change its JDC members at any time by written notice to the other Party, which may be delivered at a scheduled meeting of the JDC. Any member of the JDC may designate a substitute to attend and perform the functions of that member at any meeting of the JDC. The JDC shall appoint one of its members as chairman, whose role shall be to convene and preside at meetings of the JDC, but the chairman shall not be entitled to prevent items from being discussed. Each Party may, with the consent of the other Party, such consent not to be unreasonably withheld or delayed, invite non- member representatives of such Party to attend meetings of the JDC. (c) Responsibilities. The JDC shall, unless as otherwise agreed to by the Parties: (i) periodically review the results of the development activities to ensure, to the extent reasonably practical, compliance with obligations under this Agreement; (ii) review protocols for any clinical studies and regulatory filings for the Compound and the Product in the Field; (iii) facilitate the exchange between the Parties of information regarding development and regulatory activities with respect to the Product; (iv) review the publication strategy with respect to the Product in the Field; and (v) perform such other duties as are specifically assigned by the Parties to the JDC in this Agreement. (d) Meetings. The JDC will hold a meeting every six (6) months, or sooner or later, as reasonably agreed to by the Parties. Such meetings may be in person, via videoconference, or via teleconference. The location of in-person JDC meetings will be determined by the Parties. At least seven (7) Business Days prior to each JDC meeting, each Party shall provide written notice to the other Party of agenda items proposed by such Party for discussion at such meeting, together with appropriate information related thereto. Reasonably detailed written minutes will be kept of all JDC meetings. Meeting minutes will be prepared by the Party at whose office such meeting is held and sent to each member of the JDC for review and approval within seven (7) Business Days after the meeting. Minutes will be deemed approved unless a member of the JDC objects to the accuracy of such minutes within ten (10) Business Day of receipt. (e) Decisions. The Parties agree that the JDC shall have no decision-making authority with respect to any matters related to this Agreement, or either Party’s development and commercialization activities. 1.4 Manufacture and Supply. (a) Obligations. Hanmi shall supply to Spectrum the Products, as set forth hereunder and in the Supply Agreement, for development and commercialization in the Field in the Spectrum Territory; provided, that the actual quantities of the commercial supply of the Products by Hanmi and purchase by Spectrum shall be set forth in the Supply Agreement. Spectrum may at any time and from time to time, in its sole discretion, choose to manufacture the Compound and/or Product itself or 11. have such by a Third Party manufacturer, subject to the following. Spectrum shall notify Hanmi and coordinate with Hanmi in good faith in advance of engaging any Third Party manufacturer. If Spectrum elects to manufacture itself, or have manufactured the Compound and/or the Product by a Third Party manufacturer of its choice, Spectrum shall nevertheless continue to satisfy minimum purchase obligation set forth in the Supply Agreement and Hanmi shall perform a technical transfer to Spectrum or such Third Party manufacturer. The expense for such technical transfer shall be allocated as mutually agreed by the Parties and as set forth in the Supply Agreement. Further detail relating to the supply of (i) clinical trial Product is set forth in Section 3.4(b), and (ii) commercial Product is set forth in Section 3.4(c). (b) Clinical Supply. (i) Subject to the terms of this Agreement, Hanmi shall supply, as ordered by Spectrum, a reasonable number of units of the Products, which is anticipated to be [***] in the aggregate to Spectrum for use in development activities (including clinical trials) related to the Products in the Field. (ii) The parties shall agree on the timeframe for delivery of the Products under Section 3.4(b)(i), which shall take into consideration the Parties obtaining and complying with all relevant regulatory approvals and requirements, including cGMPs, for the Products to be delivered, Hanmi’s production capacities and supply capabilities and Spectrum’s requirement of the Product to conduct development activities (including clinical trials). Spectrum will order the Products in accordance with the mutually agreed time frame for delivery and Hanmi agrees that time is of the essence with respect to the delivery dates set forth in Spectrum’s purchase orders. (iii) Hanmi will ship the Products using such carriers as Spectrum may designate in the purchase orders or otherwise in writing to Hanmi. The Products supplied hereunder will be suitably packed for shipment and labeled for shipment to the address specified in Spectrum’s order. All shipments shall be FCA place of shipment (Incoterms 2010), at which point, all title to, and risk of loss of, the Product shall pass to Spectrum or its designee. All freight, insurance, and other shipping expenses from the F.C.A. point shall be paid by Spectrum. (iv) Products supplied by Hanmi under Section 3.4(b) of this Agreement shall conform to the Product Specifications, the Quality Agreement and cGMPs. Hanmi shall ship the Products to Spectrum not more than [***] from the date of their production by Hanmi unless otherwise agreed by the Parties; provided that, Spectrum shall issue a Purchase Order [***] before the Delivery Date as set forth in the Supply Agreement. Prior to shipment of the Products to Spectrum, Hanmi shall inspect and perform testing of the Products in accordance with the Quality Agreement and industry standards in order to confirm that the Products conform to the Product Specifications in all respects. Concurrently with each shipment of the Products, Hanmi shall provide Spectrum a Certificate of Analysis and Certificate of Compliance for each lot of the Product included in such shipment. Without limiting the foregoing, Hanmi will ensure that the Products are manufactured, stored, and transported in accordance with Applicable Laws including the cGMPs. (v) Within [***] of the receipt by Spectrum of the Products at its facility (the “Inspection Period”), Spectrum shall have the right to perform testing and analysis, on a sample basis, in accordance with the Quality Agreement to determine whether the Products conform to the Product Specifications. If Spectrum determines that the delivered Products do not conform to the Product Specifications, Spectrum shall notify Hanmi thereof in writing along with a detailed report and data regarding the alleged non-conformity (a “Non-Conformity Report”) within the Inspection Period. Within [***] of receiving such Non-Conformity Report, Hanmi shall notify Spectrum in writing whether it agrees or disagrees with such Non-Conformity Report. In the event Hanmi agrees to the Non-Conformity Report, Spectrum shall return only the non-conforming Products to Hanmi at Hanmi’s expense within [***] following receipt of Hanmi’s written notice confirming that it agrees to the Non-Conformity Report and the required documents to customs for the return of the Product. Upon receipt of such non-conforming Products, Hanmi shall replace such nonconforming Products with conforming Products as soon as commercially possible at Hanmi’s expense. For the avoidance of doubt, if Spectrum fails to inform Hanmi within the Inspection Period, Spectrum shall be deemed to have accepted the 12. delivered Products as being conforming to the Product Specifications (including cGMPs). In the case of latent defects, which shall mean a defect in the Product caused solely as a result of defective manufacturing of the Product by Hanmi and which defect could not have been discovered during the Inspection Period through Commercially Reasonable Efforts (a “Latent Defect”), if Spectrum becomes aware of a latent defect in the Products after the-Inspection Period has ended, Spectrum shall promptly notify Hanmi in writing along with a detailed report and data regarding the alleged latent defect (a “Latent Defect Report”) within [***] from the date the Inspection Period ended (the “Latent Defect Inspection Period”). Within [***] of receiving such Latent Defect Report, Hanmi shall notify Spectrum in writing whether it agrees or disagrees with such Latent Defect Report. In the event Hanmi agrees to the Latent Defect Report, Hanmi shall replace the defective Products with Products that do not contain the latent defect at Hanmi’s expense as soon as commercially possible. For the avoidance of doubt, if Spectrum fails to notify Hanmi about the Latent Defect within the Latent Defect Inspection Period, the Products delivered shall be deemed to be free of latent defects and accepted by Spectrum as being conforming to the Product Specifications. Inspection or acceptance of the Products shall not constitute a waiver of any rights Spectrum may have based on Hanmi’s warranties with the exception of Section 7.2(j). If the Parties disagree as to whether the delivered Products conform to the Product Specifications or not or contain a latent defect, the Parties shall refer such dispute to an independent laboratory mutually accepted to both Parties, which analysis shall be binding on the Parties solely for determining whether the Products conform to the Product Specifications or not or contain a latent defect. If such testing confirms that the Products do not conform to the Product Specifications, Hanmi shall bear the cost of the testing as well as the cost for replacing the nonconforming Products whereas if the testing determines that the Products conform to the Product Specifications, Spectrum shall bear the cost of testing. (vi) In the event of any shortage or delay in supply of Products to Spectrum by Hanmi, the supply of Products to Spectrum shall be apportioned between Spectrum and Hanmi (including any other licensees) on a pro-rata basis according to the needs of the then-active clinical trials requiring supplies of the Products. (vii) Hanmi shall maintain (a) complete and adequate records of all batch records, tests and analyses carried out with respect to the Products supplied to Spectrum, (b) complete, accurate and authentic accounts, notes, data and records relating to the supply of Products under this Agreement adequate to comply with all Applicable Laws, and (c) complete adequate records pertaining to the methods and facilities used by it for the manufacture, testing and supply of the Products to Spectrum, including batch records, in-process controls, quality control data and deviation reports. (viii) No more than once in each calendar year during the Term while Spectrum is performing development activities, Spectrum shall have the right, with at least thirty (30) calendar days’ written prior notice, to inspect Hanmi’s (to the extent applicable) manufacturing, packaging, laboratory and warehousing facilities utilized in the manufacture, packaging, storage, testing, shipping or receiving of the Products; provided, however, such inspection shall not interfere with the daily operation of Hanmi’s business. This inspection right includes the right to audit (a) the manufacturing facilities, (b) to inspect quality control procedures, and (c) to audit any records and reports pertinent to the manufacturing, disposition, or transport of the Products to confirm compliance with all Applicable Laws for the supply of each Product, including with applicable cGMPs. (ix) Hanmi shall obtain and maintain such FDA and other Regulatory Authority approvals of facility and processes as may be required to manufacture the Products in Hanmi’s manufacturing facilities for supply of the Products to Spectrum. Hanmi shall prepare and submit to Spectrum all reports concerning manufacture of the Products that are reasonably necessary to support Marketing Approvals of the Products in the Spectrum Territory. (x) If a facility that manufactures the Products is inspected by representatives of any Regulatory Authority in connection with manufacture of the Products, Hanmi shall notify Spectrum promptly (by telephone and in writing) upon learning of such inspection, and shall supply Spectrum with copies of any related correspondence or other documentation, or portions thereof, in the possession of Hanmi relating to the Products. Spectrum may send representatives to such facilities and participate fully in any portion of such inspection. Hanmi shall inform Spectrum of the result of any regulatory inspection, which affects the production of a Product, including providing a copy of any notice 13. of inspection, notice of violation or other similar notice or report received by Hanmi affecting production, facility, testing, storage or handling of the Product(s).In the event that there are inspectional observations directly relating to the Product(s) (FDA Form 483 and/or other applicable form), Spectrum shall be informed immediately and receive a copy of the inspectional observations and shall have the opportunity to review and provide Hanmi with comments to Hanmi’s response. (xi) Clinical Supply Transfer Price. Spectrum shall pay to Hanmi and Hanmi shall sell to Spectrum clinical supplies of Product at a price of [***] not to exceed [***]. Hanmi shall keep complete, fair, and true books of accounts and records for the purpose of determining the amounts payable by Spectrum pursuant to this Section 3.4(b)(xi). Such books and records shall be kept for such period of time required by law, but no less than three (3) years following the end of the calendar year to which they pertain. Spectrum shall have the right to cause an independent, certified public accountant reasonably acceptable to Hanmi to audit such records to confirm COG and purchase price for the Products for a period covering not more than three (3) years following the calendar year to which they pertain. Such audits may be exercised during normal business hours upon reasonable prior written notice to Hanmi. Prompt adjustments shall be made by the Parties to reflect the results of such audit. Spectrum shall bear the full cost of such audit unless such audit discloses an overpayment by Spectrum of more than five percent (5%) of the amount of price due under this Agreement, in which case, Hanmi shall bear the reasonable cost of such audit and shall promptly remit to Spectrum the amount of any overpayment. Any overpayment by Spectrum revealed by an audit shall be fully-creditable against future payment owed by Spectrum to Hanmi (and if no further payments are due, shall be refunded by Hanmi at the request of Spectrum. (c) Commercial Supply Agreement. The Parties shall negotiate and execute a written supply agreement for the commercial supply of the Products by Hanmi to Spectrum (the “Supply Agreement”) by October 31, 2014. The Parties agree that the Supply Agreement shall be consistent with the terms set forth on Exhibit 3.4(c). (d) Quality Agreement. The Parties agree to execute a quality assurance agreement (the “Quality Agreement”) as per the timeline set forth in the Supply Agreement. (e) Drug Master File. Hanmi shall register a Drug Master File for the Compound in each country in the Territory and allow Spectrum (or Affiliates or Sublicensees, as applicable) to refer to such Drug Master File; provided, however, if Hanmi decides not to register a Drug Master File or equivalent for the Compound in any country in the Spectrum Territory, then Hanmi shall provide to Spectrum or its third party designees (as contemplated by this Agreement) all necessary information and consents (including rights of reference) to allow Spectrum to do so in such country in the Spectrum Territory, in which case Spectrum shall allow Hanmi (or Affiliates or licensees, as applicable) to refer to such Drug Master File or equivalent. Hanmi agrees not to make any changes to manufacturing process, raw materials and intermediates sourcing and specifications, test methods and final specifications, without prior written consent from Spectrum. 1.5 Commercialization. Spectrum (itself and through its Affiliates and Sublicensees, as applicable) shall be solely responsible, at its own expense, for commercialization of the Product in the Field in the Spectrum Territory. 1.6 Compliance with Applicable Laws. Each Party shall conduct, and shall require its Affiliates and Sublicensees and other licensees, and if applicable, Third Party manufacturers to conduct, all development, regulatory, manufacturing and commercialization activities with respect to the Compound and the Product in the Territory in compliance with all Applicable Laws, including good laboratory and clinical practices under the Applicable Laws of the country in which such activities are conducted. 1.7 Diligence. 14. (a) Development and Regulatory. Spectrum (itself and through its Affiliates and Sublicensees, as applicable) shall use Commercially Reasonable Efforts to develop and obtain Marketing Approvals of the Products for an indication in the Field in the Major Markets in the Spectrum Territory. (b) Commercialization. Following receipt of Marketing Approvals for any Product in the Field in any Major Market in the Spectrum Territory, Spectrum (itself and through its Affiliates and Sublicensees, as applicable) shall use Commercially Reasonable Efforts to commercialize such Product in in such country. 4. Payments. 1.1 Option Exercise Fee. Within forty-five (45) Business Days of the Initiation of the first Neutropenia Trial by Spectrum or its Sublicensee in the Territory, Spectrum shall make a one-time, non-refundable, non-creditable (except as set forth in Section 9.2) payment to Hanmi of U.S.$ [***] (the “Option Exercise Fee”). At Spectrum’s sole discretion, the Option Exercise Fee shall be payable in cash or equity in the form of Spectrum’s common stock. If Spectrum elects to pay the Option Exercise Fee in equity, the number of shares of Spectrum’s common stock to be issued to Hanmi shall be equal to the number obtained by dividing 3,000,000 by the last reported sales price of Spectrum’s common stock on The NASDAQ Stock Market, or if the common stock is not then listed on The NASDAQ Stock Market such other principal exchange upon which the common stock is then traded, averaged over the forty-five (45) trading day period ending on the Effective Date. Hanmi acknowledges and agrees that Spectrum common stock shall not be registered under the Securities Act of 1933, as amended, but shall be resalable under Rule 144. 1.2 Milestone Payments. (a) Payments. Upon the first occurrence of each of the events set forth below for a Product, each of the following one- time, non-refundable, non-creditable (except as set forth in Section 9.2) milestone payments shall be payable by Spectrum to Hanmi in accordance with Section 4.2(b) below: Milestone Event Milestone Payment First Marketing Approval for a Product by the FDA for any indication U.S.$ [***] Annual Net Sales of the Products equals or exceeds U.S.$ [***] U.S.$ [***] Annual Net Sales of the Products equals or exceeds U.S.$ [***] U.S.$ [***] Annual Net Sales of the Products equals or exceeds U.S.$ [***] U.S.$ [***] Annual Net Sales of the Products equals or exceeds U.S.$ [***] U.S.$ [***] Annual Net Sales of the Products equals or exceeds U.S.$ [***] U.S.$ [***] (b) Milestone Payments. Spectrum shall promptly inform Hanmi of the achievement of each milestone event set forth in Section 4.2(a) above and shall pay to Hanmi the corresponding milestone payment within thirty (30) days of the receipt of an invoice from Hanmi for such fee. 1.3 Royalty Payments. 15. (a) Royalty Rate. Subject to the terms and conditions of this Agreement, Spectrum shall pay to Hanmi royalties as set forth below on aggregate Annual Net Sales (whether such aggregate Annual Net Sales are achieved by Spectrum or any of its Affiliates or Sublicensees): Aggregate Annual Net Sales Royalty Rate For that portion of aggregate Annual Net Sales that is less than or equal to U.S.$ [***] [***] 16. For that portion of aggregate Annual Net Sales that is greater than U.S.$ [***] and less than or equal to U.S.$ [***] [***] For that portion of aggregate Annual Net Sales that is greater than U.S.$ [***] and less than or equal to U.S.$ [***] [***] For that portion of aggregate Annual Net Sales that is greater than U.S.$ [***] [***] For the avoidance of doubt, and by way of example for clarity in calculating the royalties, assuming that the Net Sales in each calendar quarter in a calendar year is U.S.$ 600 Million, the royalties shall be calculated as follows: Calendar Quarter Net Sales Amount (X) Royalty Rate Q1 U.S.$ 0 ≤ X ≤ U.S.$ [***] U.S.$ [***] ≤ X ≤ U.S.$ [***] [***] [***] Q2 U.S.$ [***] < X ≤ U.S.$ [***] U.S.$ [***] ≤ X ≤ U.S.$ [***] [***] [***] Q3 U.S.$ [***] ≤ X ≤ U.S.$ [***] [***] Q4 U.S.$ [***] ≤ X ≤ U.S.$ [***] U.S.$ [***] ≤ X ≤ U.S.$ [***] [***] [***] (b) Royalty Term. Royalty payments pursuant to this Section 4.3 shall be payable upon a Product-by-Product and country-by-country basis from Commercial Launch of the Product in a given country until the earlier of (i) expiration of the last-to-expire Valid Claim covering the Product in such country, or (ii) the date upon which a Biosimilar Product is Commercially Launched and upon which is expired any other exclusivity protection of the Product in such country including the expiration of regulatory data protection for new chemical entities, data exclusivity period or orphan drug status (the “Royalty Term”). 1.4 Royalty Reduction. (a) Third Party Royalties. If Spectrum is required to pay to a Third Party amounts under agreements for Patents or other intellectual property rights acquired or licensed by Spectrum after the Effective Date that are necessary or desirable for the manufacture, use or sale of a Product in and for any country within the Spectrum Territory (“Third Party Royalties”) and are not subject to Hanmi’s 17. obligations to procure a license under Section 10.1, then Spectrum may deduct, on a Product-by-Product and country-by-country basis, [***] of the Third Party Royalties from the royalties owed to Hanmi pursuant to Section 4.3 above with respect to Net Sales of such Product in such country; provided such deductions shall not result in the royalties that would otherwise be payable by Spectrum to Hanmi for such Product in such country in any particular calendar quarter being reduced by [***]. Any amounts that Spectrum was not able to deduct during any particular calendar quarter as a result of the foregoing proviso may be deducted in the following calendar quarter(s) subject to the same proviso. (b) Biosimilar Competition. If during the Royalty Term with respect to a Product in a country within the Spectrum Territory, a Biosimilar Product is Commercially Launched, Spectrum shall pay no royalties to Hanmi for Net Sales of the Product in such country during the remaining Royalty Term. 5. Payment; Records; Audits. 1.1 Payment; Reports. Royalties shall be calculated and reported for each calendar quarter. A report of Net Sales in sufficient detail to permit confirmation of the accuracy of the payment due, including, on a country-by-country basis, the number of Products sold, the gross sales and Net Sales of such Products, the royalties payable, the method used to calculate the royalties, the exchange rates used and any adjustments to royalties payable in accordance with Section 4.4 shall be due to Hanmi within [***] of the end of each calendar quarter along with, and all payments due to Hanmi under this Agreement shall be paid within [***] of the receipt of an invoice from Hanmi for such payments. 1.2 Manner and Place of Payment. All payments hereunder shall be payable in U.S. dollars. When conversion between currencies is required, such conversion shall be at an exchange rate equal to the average of the daily rates of exchange for the currency of the country from which the royalty payments are payable as reported in the Wall Street Journal, during the calendar quarter for which a payment is due. All payments owed under this Agreement shall be made by wire transfer in immediately available funds to a bank and account designated in writing by Hanmi, unless otherwise specified in writing by Hanmi. 1.3 Income Tax Withholding. If any withholding taxes are required to be withheld by Spectrum from any payment of royalties made to Hanmi under this Agreement, Spectrum will (a) deduct such withholding taxes from the royalty payment made to Hanmi, (b) timely pay the withholding taxes to the proper taxing authority, and (c) send proof of payment to Hanmi and certify its receipt by the taxing authority within thirty (30) days following such payment. For purposes of this Section 5.3, each Party agrees to provide the other with reasonably requested assistance to enable the due deduction by the paying Party and appropriate recovery by the other Party, which assistance includes the provision of any tax forms and other information that may be reasonably necessary in order for the paying Party not to withhold tax or to withhold tax at a reduced rate under an applicable bilateral income tax treaty. 1.4 Restrictions on Fund Transfers. In the event that, by reason of Applicable Law in any country, it becomes impossible or illegal for Spectrum to transfer, or have transferred on its behalf, payments owed Hanmi hereunder, Spectrum will promptly notify Hanmi of the conditions preventing such transfer and such payments will be deposited in local currency in the relevant country to the credit of Hanmi in a recognized banking institution designated by Hanmi. 1.5 Records; Audits. Spectrum shall keep, and require Sublicensees to keep, complete, fair, and true books of accounts and records for the purpose of determining the amounts payable to Hanmi 18. pursuant to this Agreement. Such books and records shall be kept for such period of time required by law, but no less than two (2) years following the end of the calendar year to which they pertain. Hanmi shall have the right to cause an independent, certified public accountant reasonably acceptable to Spectrum to audit such records to confirm Net Sales, royalties and other payments for a period covering not more than two (2) years following the calendar year to which they pertain. Such audits may be exercised during normal business hours upon reasonable prior written notice to Spectrum. Prompt adjustments shall be made by the Parties to reflect the results of such audit. Hanmi shall bear the full cost of such audit unless such audit discloses an underpayment by Spectrum of more than [***] of the amount of royalties or other payments due under this Agreement for any applicable calendar quarter, in which case, Spectrum shall bear the reasonable cost of such audit and shall promptly remit to Hanmi the amount of any underpayment. Any overpayment by Spectrum revealed by an audit shall be fully- creditable against future payment owed by Spectrum to Hanmi (and if no further payments are due, shall be refunded by Hanmi at the request of Spectrum. 1.6 Late Payments. In the event that any payment due under this Agreement is not made when due, the payment shall accrue interest from the date due at the prime rate (as defined in the U.S. Federal Reserve Statistical Release H.15 or any successor thereto) on the last Business Day of the applicable quarter prior to the date on which such payment is due, plus [***] per annum; provided, however, that in no event shall such rate exceed the general usury limit in the State of New York, USA. The payment of such interest shall not limit Hanmi from exercising any other rights it may have as a consequence of the lateness of any payment. 6. Confidentiality and Publication. 1.1 Confidential Information. Except to the extent expressly authorized by this Agreement or otherwise agreed in writing by the Parties, each Party (in such capacity, the “Receiving Party”) agrees that, during the Term and for [***] thereafter, it shall keep confidential and shall not publish or otherwise disclose to any Third Party, and shall not use for any purpose, other than as expressly provided for in this Agreement or any other written agreement between the Parties, any Confidential Information furnished or made available to it by or on behalf of the other Party (in such capacity, the “Disclosing Party”). The Receiving Party shall use at least the same standard of care as it uses to protect proprietary or confidential information of its own (but in no event less than reasonable care) to ensure that its, and its Affiliates,’ employees, agents, consultants, and other representatives do not disclose or make any unauthorized use of the Confidential Information. The Receiving Party shall promptly notify the Disclosing Party upon discovery of any unauthorized use or disclosure of the Disclosing Party’s Confidential Information. 1.2 Exceptions. Confidential Information shall not include any information which the Receiving Party can prove by competent evidence: (a) is now, or hereafter becomes, through no act or failure to act on the part of the Receiving Party, generally known or available; (b) is known by the Receiving Party and/or any of its Affiliates at the time of receiving such information, as evidenced by its records; (c) is hereafter furnished to the Receiving Party and/or any of its Affiliates by a Third Party, as a matter of right and without restriction on disclosure; or (d) is independently discovered or developed by the Receiving Party and/or any of its Affiliates, without the use of Confidential Information of the Disclosing Party. 1.3 Authorized Disclosure. Notwithstanding the provisions of Section 6.1, the Receiving Party may disclose Confidential Information of the Disclosing Party as expressly permitted by this Agreement, or if and to the extent such disclosure is reasonably necessary in the following instances: (a) filing or prosecuting Patents as permitted by this Agreement; (b) enforcing such Party’s rights under this Agreement; (c) prosecuting or defending litigation as permitted by this Agreement; (d) complying with applicable court orders or governmental regulations; 19. (e) disclosure to Affiliates, actual and potential licensees and sublicensees, employees, consultants, contractors or agents of the Receiving Party who have a need to know such information in order for the Receiving Party to exercise its rights or fulfill its obligations under this Agreement, provided, in each case, that any such Affiliate, actual or potential licensee or sublicensee, employee, consultant or agent agrees to be bound by terms of confidentiality and non-use comparable in scope to those set forth in this Article 6; (f) disclosure to Third Parties in connection with due diligence or similar investigations by such Third Parties, and disclosure to potential Third Party investors in confidential financing documents, provided, in each case, that any such Third Party agrees to be bound by similar terms of confidentiality and non-use comparable in scope to those set forth in this Article 6. Notwithstanding the foregoing, in the event a Party is required to make a disclosure of the other Party’s Confidential Information pursuant to Section 6.3(c) or Section 6.3(d), it will, except where impracticable, give reasonable advance notice to the other Party of such disclosure and use efforts to secure confidential treatment of such information at least as diligent as such Party would use to protect its own confidential information, but in no event less than reasonable efforts. In any event, the Parties agree to take all reasonable action to avoid disclosure of Confidential Information hereunder. 1.4 Public Announcements. (a) Press Releases. As soon as practicable following the date hereof, the Parties shall each issue a mutually agreed press release announcing the existence of this Agreement. Except as required by Applicable Laws (including disclosure requirements of the U.S. Securities and Exchange Commission (“SEC”) or any stock exchange on which securities issued by a Party or its Affiliates are traded), neither Party shall make any other public announcement concerning this Agreement or the subject matter hereof without the prior written consent of the other, which shall not be unreasonably withheld or delayed; provided that each Party may make any public statement in response to questions by the press, analysts, investors or those attending industry conferences or financial analyst calls, or issue press releases, so long as any such public statement or press release is not inconsistent with prior public disclosures or public statements approved by the other Party pursuant to this Section 6.4 and which do not reveal non-public information about the other Party. In the event of a required public announcement, to the extent practicable under the circumstances, the Party making such announcement shall provide the other Party with a copy of the proposed text of such announcement sufficiently in advance of the scheduled release to afford such other Party a reasonable opportunity to review and comment upon the proposed text. (b) Filing of this Agreement. The Parties will coordinate in advance with each other in connection with the filing of this Agreement (including redaction of certain provisions of this Agreement) with the SEC or any stock exchange or governmental agency on which securities issued by a Party or its Affiliate are traded, and each Party will use reasonable efforts to seek confidential treatment for the terms proposed to be redacted; provided that each Party will ultimately retain control over what information to disclose to the SEC or any stock exchange or other governmental agency, as the case may be, and provided further that the Parties will use their best efforts to file redacted versions with any governing bodies which are consistent with redacted versions previously filed with any other governing bodies. Other than such obligation, neither Party (or its Affiliates) will be obligated to consult with or obtain approval from the other Party with respect to any filings to the SEC or any stock exchange or other governmental agency. 1.5 Publication. At least thirty (30) days prior to publishing, publicly presenting, and/or submitting for written or oral publication a manuscript, abstract or the like that includes Information relating to any Compound or Product that has not been previously published, each Party shall provide to the other Party a draft copy thereof for its clinical review (unless such Party is required by law to publish such Information sooner, in which case such Party shall provide such draft copy to the other Party as much in advance of such publication as possible). The publishing Party shall consider in good faith any comments provided by the other Party during such thirty (30) day period. In addition, the publishing Party shall, at the other Party’s reasonable request, remove therefrom any Confidential Information of 20. such other Party. The contribution of each Party shall be noted in all publications or presentations by acknowledgment or co-authorship, whichever is appropriate. 1.6 Prior Non-Disclosure Agreement. As of the Effective Date, the terms of this Article 6 shall supersede any prior non- disclosure, secrecy, or confidentiality agreement between the Parties (or their Affiliates) dealing with the subject of this Agreement, including the Nondisclosure Agreement. Any information disclosed pursuant to any such prior agreement shall be deemed Confidential Information for purposes of this Agreement. 1.7 Equitable Relief. Given the nature of the Confidential Information and the competitive damage that would result to a Party upon unauthorized disclosure, use or transfer of its Confidential Information to any Third Party, the Parties agree that monetary damages would not be a sufficient remedy for any breach of this Article 6. In addition to all other remedies, a Party shall be entitled to seek specific performance and injunctive and other equitable relief as a remedy for any breach or threatened breach of this Article 6. 7. Representations and Warranties; Limitation of Liability. 1.1 Mutual Representations and Warranties Covenants. Each Party represents and warrants to the other that, as of the Effective Date and with respect to Sections 7.1(e) to (h) covenants: (a) Corporate Power. It is duly organized and validly existing under the laws of its state of incorporation or formation, and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof. (b) Due Authorization. It is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder, and the person or persons executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate action. (c) Binding Agreement. This Agreement is legally binding upon it, enforceable in accordance with its terms. The execution, delivery, and performance of this Agreement by it does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it. (d) Grant of Rights; Maintenance of Agreements. It has not, and will not during the term of this Agreement, grant any right to any third party which would conflict with the rights granted to the other Party hereunder. It has (or will have at the time performance is due) maintained and will maintain and keep in full force and effect all agreements (including license agreements) and filings (including patent filings) necessary to perform its obligations hereunder. (e) No Debarment. Neither it nor any of its Affiliates is debarred or disqualified under the FD&C Act or comparable Applicable Laws in the Territory and it does not, and will not during the Term, employ or use the services of any person who is debarred or disqualified, in connection with activities relating to the Compound outside the Field; and in the event that it becomes aware of the debarment or disqualification or threatened debarment or disqualification of any person providing services to it, including any of its Affiliates or sublicensees, which directly or indirectly relate to the Compound or Product, it shall immediately notify the other Party in writing and shall cease employing, contracting with, or retaining any such person to perform any services relating to the Compound or Product. (f) Payment to Public Officials or Entities. Neither it nor its Affiliates, and, and to its knowledge, none of their respective employees and contractors have or shall, in connection with the performance of their respective obligations under this Agreement directly or indirectly through Third Parties, pay, promise or offer to pay, or authorize the payment of, any money or give any promise or offer to give, or authorize the giving of anything of value to a governmental, regulatory or public official or entity or other person for purpose of obtaining or retaining business for or with, or directing business to, 21. any person, (it being understood that, without any limitation to the foregoing, neither it nor its Affiliates, and to its knowledge, their respective employees and contractors, has not directly or indirectly promised, offered or provided any corrupt payment, gratuity, emolument, bribe, kickback, illicit gift or hospitality or other illegal or unethical benefit to a governmental, regulatory or public official or entity or any other person in connection with the performance of its obligations under this Agreement, and shall not, directly or indirectly, engage in any of the foregoing. (g) FCPA. It and its Affiliates, and their respective employees and contractors, in connection with the performance of their respective obligations under this Agreement, shall not, nor cause the other Party or its officers, directors, employees or agents to be in violation of the U.S. Foreign Corrupt Practices Act, Export Control Laws, or any other Applicable Laws or otherwise cause any reputational harm to the other Party or its officers, directors, employees or agents. (h) Violation of Applicable Laws. It shall immediately notify the other Party if it has any information or suspicion that there may be a violation of the Applicable Laws in connection with the performance of its obligations under this Agreement or the performance of research, development, manufacturing, regulatory or commercialization activities with respect to the Compound or Product. 1.2 Additional Hanmi Representations, Warranties and Covenants. Hanmi represents, warrants, and covenants to Spectrum, as follows: (a) Hanmi has (i) sufficient legal and/or beneficial title, ownership or license rights, free and clear from any mortgages, pledges, liens, security interests, options, conditional and installment sale agreements, encumbrances, charges or claims of any kind, in or to the Licensed Technology to grant the License to Spectrum as purported to be granted pursuant to this Agreement, including Spectrum’s rights to sublicense as described in Section 2.1(c); and (ii) no Third Party has taken any action claiming legal and/or beneficial ownership of or license to any of the Licensed Patents; (b) Hanmi has not received any notice from a Third Party alleging that (i) the practice of the Licensed Technology infringes or may infringe such Third Party’s intellectual property right, (ii) any research, development, manufacture, or commercialization of the Products by Hanmi prior to the Effective Date infringed or misappropriated the intellectual property rights of such Third Party or (iii) the exercise of Spectrum’s rights granted under this Agreement infringes or would infringe any Third Party intellectual property rights; (c) To the best of Hanmi’s knowledge, and as of the Effective Date, the development, manufacture, and commercialization of the Products can be carried out without infringing or misappropriating any intellectual property rights Controlled by a Third Party; (d) To the best of Hanmi’s knowledge, and as of the Effective Date, the Licensed Patents that are issued as of the Effective Date are valid and in force, (ii) no Third Party has asserted in writing that such issued Patents are invalid or unenforceable in the Territory and (iii) Hanmi does not have knowledge of any Information which leads it to believe that any such issued Patents are invalid or unenforceable; (e) there are no pending legal actions, adverse actions, claims, investigations, suits or proceedings against Hanmi or any of its Affiliates, at law or in equity, or before or by any Regulatory Authority, nor has Hanmi received any written notice regarding any pending or threatened legal actions, adverse actions, claims, investigations, suits or proceedings against Hanmi or any of its Affiliates, at law or in equity, or before or by any Regulatory Authority, with respect to the Licensed Technology, and no Licensed Patent is the subject of any interference, opposition, cancellation or other protest proceeding; (f) No authorization, consent, approval of a Third Party, nor to Hanmi’s Knowledge, any license, permit, exemption of or filing or registration with or notification to any court or Regulatory Authority is or will be necessary for the (i) the consummation by Hanmi of the transactions contemplated hereby; or (ii) prevention of the termination of any right, privilege, license or agreement relating to the Licensed Technology or the continuation thereof following the Effective Date; 22. (g) Hanmi has complied with all Applicable Laws in connection with Hanmi’s prosecution of the Licensed Patents, including the duty of candor owed to any patent office pursuant to such laws; (h) The Licensed Technology includes all intellectual property rights Controlled by Hanmi, which are reasonably necessary for the development and commercialization of the Products in the Field by Spectrum; (i) Licensed Patents listed on Exhibit 1.48 are the only patents and patent applications relating to the Compounds and/or Products, including the use and methods of manufacture of the Compounds and/or Products, in which Hanmi or a Hanmi Affiliate has an interest either alone or jointly with any Third Party; (j) The Products to be supplied by Hanmi hereunder shall (a) be free from defects in materials and workmanship, (b) conform to the Product Specifications, (c) not be adulterated or misbranded within the meaning of the FD&C Act, as amended, (d) be free of all liens, security interests, and other claims of any nature created by Hanmi, with good title passing to Spectrum upon delivery at Spectrum’s facility, (e) have been manufactured, stored and transported in compliance with Applicable Laws including cGMPs. 1.3 Additional Spectrum Representations, Warranties and Covenants. Spectrum represents, warrants, and covenants to Hanmi, to the best of its actual knowledge as of the Effective Date, as follows: (a) Spectrum shall be liable for all matters relating to the validity of its own trademarks, including any claims that the rights of any third party would be infringed by use of such trademarks in the performance of this Agreement; (b) Spectrum shall not during or after the Term of this Agreement, do or cause to be done any act or thing challenging, contesting, impairing, invalidating, or tending to impair or invalidate any of Hanmi’s rights to the Licensed Technology, or any registrations/renewal derived from such rights. (c) Spectrum represents, warrants and covenants that it will not grant any rights in sublicenses that are inconsistent with the License and all other terms and conditions of this Agreement, and Spectrum shall provide Hanmi with a copy of all sublicense agreements entered into by Spectrum in relation to this Agreement, provided that Spectrum may redact confidential or sensitive information that is not necessary for Hanmi to confirm compliance with this Agreement.. 1.4 Performance by Affiliates, Sublicensees and Subcontractors. The Parties recognize that each may perform some or all of its obligations or exercise some or all of its rights under this Agreement through one or more Affiliates or subcontractors or, in the case of Spectrum, Sublicensees; provided, however, that each Party shall remain responsible for the performance by its Affiliates, subcontractors and sublicensees and shall cause its Affiliates, subcontractors and sublicensees to comply with the provisions of this Agreement in connection with such performance. In particular, if any Affiliate, subcontractor or sublicensee participates in research, development, manufacturing or commercialization activities under this Agreement or with respect to Products, the restrictions of this Agreement which apply to the activities of such Party with respect to Products shall apply equally to the activities of such Affiliate, subcontractor or sublicensee. 1.5 Limitation of Liability. EXCEPT FOR EACH PARTY’S CONFIDENTIALITY OBLIGATIONS SET FORTH IN ARTICLE 7.4, INDEMNIFICATION OBLIGATIONS SET FORTH IN ARTICLE 10 AND GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF EITHER PARTY, ITS AFFILIATES, LICENSORS, CONTRACTORS, DISTRIBUTORS OR THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, CONSULTANTS OR AUTHORIZED AGENTS, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, NEITHER PARTY SHALL HAVE ANY LIABILITY ARISING OUT OF, OR OTHERWISE RELATING TO, THIS AGREEMENT, FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL, COLLATERAL, PUNITIVE, EXEMPLARY, OR INDIRECT DAMAGES SUFFERED BY THE OTHER PARTY OR ANY THIRD PARTY 23. INCLUDING, WITHOUT LIMITATION, LOSS OF GOODWILL, LOSS OF PROFITS OR REVENUES, LOSS OF SAVINGS, LOSS OF USE, INTERRUPTION OF BUSINESS, INJURY OR DEATH TO PERSONS OR DAMAGE TO PROPERTY, WHETHER BASED ON BREACH OF CONTRACT, TORT OR ARISING IN EQUITY, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE PARTIES ACKNOWLEDGE THAT THE LIMITATIONS OF LIABILITY IN THIS SECTION 7.5 AND IN THE OTHER PROVISIONS OF THIS AGREEMENT AND THE ALLOCATION OF RISK HEREIN ARE AN ESSENTIAL ELEMENT OF THE BARGAIN BETWEEN THE PARTIES, WITHOUT WHICH SPECTRUM AND HANMI WOULD NOT HAVE ENTERED INTO THIS AGREEMENT AND FEES PAYABLE HEREUNDER REFLECTS THIS ALLOCATION OF RISK AND THE LIMITATION OF LIABILITY SPECIFIED HEREIN. 1.6 DISCLAIMER. HANMI’S EXPRESS REPRESENTATIONS AND WARRANTIES STATED IN THIS AGREEMENT ARE IN LIEU OF, AND HANMI HEREBY DISCLAIMS, ALL OTHER REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT, WHETHER ORAL OR WRITTEN, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AND INCLUDING, WITHOUT LIMITATION, ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OR NON- MISAPPROPRIATION OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS (HOWEVER FOR THE AVOIDANCE OF DOUBT, THIS SECTION 7.6 DOES NOT NEGATE SECTION 7.2). 8. Intellectual Property. 1.1 Ownership. (a) Licensed Technology. As between the Parties, Hanmi is the owner of all right, title, and interest in and to the Licensed Technology. (b) Improvements to Licensed Technology. Each Party shall be the sole owner of all right, title and interest in the inventions, developments, modifications, or improvements related to the Compound and/or the Product (the “Improved Technology”) Developed solely by such Party’s employees or agents. All Improved Technology Developed solely by Hanmi’s employees or agents (“Hanmi Improved Technology”) shall be deemed to be part of the Licensed Technology and covered by the License. Each Party shall promptly disclose to the other Party all Improved Technology Developed solely by such Party’s employees or agents. Spectrum grants to Hanmi a non-exclusive, non- transferable, non-sublicensable, royalty-free, license to all Improved Technology Developed solely by Spectrum’s employees or agents (“Spectrum Improved Technology”) necessary or useful to make, have made, use, sell, distribute, import, export or otherwise exploit the Products in the Field in the Hanmi Territory (“Hanmi License”). (c) Joint Patents. The Parties shall jointly own all right, title, and interest in any Improved Technology, Developed jointly by one or more employees or agents of each Party (“Joint Improved Technology”) and the Patent rights therein. All Joint Improved Technology shall be deemed to be part of the Licensed Technology and covered by the License in the Spectrum Territory and part of the Spectrum Improved Technology and covered by the Hanmi License in the Hanmi Territory. (d) Interpretation. For purposes of this Section 8.1, “Developed” shall mean developed, conceived, authored, acquired, or created by or on behalf of a Party or the Parties. It is understood that except as expressly set forth under this Section 8.1, inventorship, authorship and other indicia of which Party Developed Improved Technology will be determined in accordance with United States patent laws in effect at the time such Improved Technology was Developed. 1.2 Patent Prosecution and Maintenance. (a) Patents. Spectrum shall use Commercially Reasonable Efforts, at its own expense, to secure appropriate intellectual property protection of the Licensed Technology and the 24. Improved Technology in the Spectrum Territory including preparing, filing, prosecuting (including any interferences, reissue proceedings and reexaminations) and maintaining Licensed Patents listed under the heading LAPS-GCSF Patents in Exhibit 1.48 in the Spectrum Territory. Spectrum shall also provide to Hanmi a copy of all original patent applications (not including continuations and divisionals) as soon as practicable prior to filing and shall consider in good faith Hanmi’s interest in maintaining know-how secrecy. Spectrum shall keep Hanmi reasonably informed of progress with regard to the preparation, filing, prosecution and maintenance of LAPS-GCSF Patents in the Spectrum Territory. Spectrum will notify Hanmi of all warning letters, conflict proceedings, reexaminations, reissuance, oppositions, revocation proceedings or any other material challenge relating to a given LAPS-GCSF Patent. Spectrum will consult with, and consider in good faith the requests and suggestions of Hanmi with respect to strategies for filing and prosecuting such Patents. In the event that Spectrum desires to abandon or cease prosecution or maintenance of any LAPS-GCSF Patent, Spectrum shall provide reasonable prior written notice to Hanmi of such intention (which notice shall, in any event, be given no later than [***] prior to the next deadline for any action that may be taken with respect to such Patent with the applicable patent office, and upon Hanmi’s written election provided no later than [***] after such notice from Spectrum, Spectrum shall permit Hanmi to continue prosecution and/or maintenance of such Patent at Spectrum’s expense. If Hanmi does not provide such election within thirty (30) days after such notice from Spectrum or fails to assume prosecution or maintenance of any LAPS- GCSF Patent with respect to which it has previously made such election, Spectrum may, in its sole discretion, continue prosecution and maintenance of such Patent or discontinue prosecution and maintenance of such Patent. In the event that Spectrum elects to discontinue prosecution and maintenance of a Patent and also refuses to bear Hanmi’s expense for the prosecution or maintenance of such a patent, then such patent shall be excluded from the License. (b) Platform Technology Patents. Hanmi shall use Commercially Reasonable Efforts, at its own expense, to secure appropriate intellectual property protection for the long acting protein/peptide discovery platform technology including preparing, filing, prosecuting (including any interferences, reissue proceedings and reexaminations) and maintaining Licensed Patents listed under the heading LAPS Platform Technology Patents in Exhibit 1.48 worldwide including Spectrum Territory. Hanmi shall also provide to Spectrum a copy of all original patent applications (not including continuations and divisionals) as soon as practicable prior to filing. Hanmi shall keep Spectrum reasonably informed of progress with regard to the preparation, filing, prosecution and maintenance of the LAPS Platform Technology Patents in the Spectrum Territory. Hanmi will notify Spectrum of all warning letters, conflict proceedings, reexaminations, reissuance, oppositions, revocation proceedings or any other material challenge relating to a given LAPS Platform Technology Patent. Hanmi will consult with, and consider in good faith the requests and suggestions of Spectrum with respect to strategies for filing and prosecuting such Patents. In the event that Hanmi desires to abandon or cease prosecution or maintenance of any LAPS Platform Technology Patent, Hanmi shall provide reasonable prior written notice to Spectrum of such intention (which notice shall, in any event, be given no later than [***] prior to the next deadline for any action that may be taken with respect to such Patent with the applicable patent office), and upon Spectrum’s written election provided no later than [***] after such notice from Hanmi, Hanmi shall permit Spectrum to continue prosecution and/or maintenance of such Patent. Spectrum shall be entitled to set-off the expense incurred on such prosecution and/or maintenance against the payments owed to Hanmi under this Agreement. If Spectrum does not provide such election within [***] after such notice from Hanmi or fails to assume prosecution or maintenance of any LAPS Platform Technology Patent with respect to which it has previously made such election, Hanmi may, in its sole discretion, continue prosecution and maintenance of such Patent or discontinue prosecution and maintenance of such Patent. (c) Cooperation of the Parties. Each Party agrees to cooperate fully in the preparation, filing, prosecution and maintenance of Patents covering Licensed Technology and in the obtaining and maintenance of any patent extensions, supplementary protection certificates and the like with respect thereto respectively at its own costs. Such cooperation includes, but is not limited to: (a) executing all papers and instruments, or requiring its employees or contractors, to execute such papers and instruments, so as to enable the other Party to apply for and to prosecute patent applications in any country as permitted by this Section 8.2; and (b) promptly informing the other Party of any matters 25. coming to such Party’s attention that may affect the preparation, filing, prosecution or maintenance of any such patent applications. 1.3 Infringement by Third Parties. (a) Notice. In the event that either Hanmi or Spectrum becomes aware of any infringement or threatened infringement by a Third Party of any Patent covering Licensed Technology in the Spectrum Territory (“Third Party Infringement”), it shall notify the other Party in writing to that effect. The Parties agree to discuss in good faith strategies for addressing the matter and cooperate with each other to terminate such Third Party Infringement without litigation. (b) Proceedings. If the Parties fail to terminate such Third Party Infringement without litigation, Spectrum shall have the first right, but not the obligation, to bring and control any action or proceeding with respect to such Third Party Infringement at its own expense and by counsel of its own choice, and Hanmi shall have the right, at its own expense, to be represented in any such action by counsel of its own choice. In the Major Markets, if after consultation, both Parties agree litigation shall be pursued, then Spectrum shall exercise its right per the preceding sentence. The parties shall endeavor in good faith to share the same local counsel, but each retain the right to select their own respective counsel. Otherwise, if Spectrum fails to bring any such action or proceeding with respect to infringement of any Licensed Patent within ninety (90) days following the notice of alleged infringement, Hanmi shall have the right to bring and control any such action at its own expense and by counsel of its own choice, and Spectrum shall have the right, at its own expense, to be represented in any such action by counsel of its own choice. (c) Cooperation; Award. In the event a Party brings an infringement action in accordance with this Section 8.3, the other Party shall cooperate fully, including, if required to bring such action, the furnishing of a power of attorney or being named as a party. Neither Party shall enter into any settlement or compromise of any action under this Section 8.3 which would, in any manner, alter, diminish, or be in derogation of, the other Party’s rights under this Agreement or obligation other Party to take or not to take any action including payment of money, without the prior written consent of such other Party. Notwithstanding the foregoing, Spectrum shall have the right to settle such action so long as such settlement makes no admissions on the part of Hanmi, or obligates Hanmi to take or not to any action, including without limitation the payment of money, without Hanmi’s prior written approval. Except as otherwise agreed by the Parties in connection with a cost-sharing arrangement, any recovery realized by a Party as a result of any action or proceeding pursuant to this Section 8.3, whether by way of settlement or otherwise, shall be applied first to reimburse the Parties’ documented out-of-pocket legal expenses relating to the action or proceeding in proportion to their expenses, and any remaining amounts shall be retained by the Party that brought and controlled such action; provided, however, any damages received by Spectrum based on sales found to be infringing by a court of competent jurisdiction shall be added to Annual Net Sales for the period in which the infringement was found to be occurred in calculating the royalty payments pursuant to Section 4.3. 1.4 Infringement of Third Party Rights. Each Party shall promptly notify the other Party in writing of any allegation by a Third Party that the activity of either Party pursuant to this Agreement infringes or may infringe the intellectual property rights of such Third Party. The Parties shall discuss in good faith strategies for addressing the matter and cooperate with each other to terminate such infringement without litigation. If, after such discussion, the Parties fail to terminate such infringement without litigation, the provisions of Section 10.1 and 10.2 shall govern the rights of the Parties. 1.5 Marking. To the extent required by law, Spectrum shall, and shall cause its Affiliates and/or Sublicensees to, mark all Products sold under this Agreement with the number of each issued Licensed Patent that applies to such Product. 1.6 Trademarks. Spectrum shall own and be responsible for all trademarks, trade names, branding, or logos related to Products in the Field in the Spectrum Territory, and will be responsible for selecting, registering, defending, and maintaining the same at Spectrum’s sole cost and expense. 9. Term; Termination. 26. 1.1 Term. This Agreement shall commence on the Effective Date, and unless terminated earlier as provided in this Article 9, shall expire on a country-by-country basis upon the expiration of all royalty payment obligations of Spectrum under Article 4 of this Agreement in such country. The duration from the Effective Date until the expiration date of this Agreement in all the countries in the Territory shall be called herein the “Term.” 1.2 Termination. (a) Mutual Agreement. The Parties may terminate this Agreement by mutual written agreement of the Parties. (b) Material Breach. A Party shall have the right to terminate this Agreement upon written notice to the other Party if such other Party is in material breach of this Agreement and has not cured such breach within sixty (60) days after notice from the terminating Party requesting cure of the breach. Any such termination shall become effective at the end of such sixty (60) day period unless the breaching Party has cured such breach prior to the end of such period. (c) Bankruptcy. A Party shall have the right to terminate this Agreement upon written notice to the other Party upon the bankruptcy, dissolution or winding up of such other Party, or the making or seeking to make or arrange an assignment for the benefit of creditors of such other Party, or the initiation of proceedings in voluntary or involuntary bankruptcy, or the appointment of a receiver or trustee of such other Party’s property that is not discharged within ninety (90) days. (d) Spectrum Termination At Will. Spectrum shall have the right to terminate this Agreement in its entirety or on a country-by-country basis, for any reason or for no reason, specifying the countries with respect to which this Agreement is terminated (the “Terminated Countries”) by giving a [***] prior written notice to Hanmi. In such event, absent a breach by Spectrum, no compensation or damages shall be due to Hanmi. Notwithstanding the foregoing, if pursuant to this Section 9.2(d), Spectrum terminates this Agreement at will without good reason in any Major Market country or in its entirety, Spectrum shall pay to Hanmi a termination fee equal to Hanmi’s capital investment specifically for manufacturing the Products less the aggregate amounts paid by Spectrum to Hanmi under this Agreement including, without limitation, Option Exercise Fee, milestone payments and royalties. To the extent Spectrum owes any milestone payments or royalties with respect to Net Sales in non-Terminated Countries following the payment of termination fee under this Section 9.2(d), Spectrum shall have the right to set-off such milestone payments and royalties up to the amount of the termination fees actually paid by Spectrum to Hanmi. For purposes of this Section 9.2(d), “good reason” shall mean a joint determination by Spectrum and Hanmi that it is no longer commercially feasible for Spectrum to continue to develop or commercialize the Compound or Products in the Terminated Countries. For clarity, any termination at will by Spectrum without Hanmi’s consent that good reason exists shall constitute a termination at will without good reason; provided, that Hanmi shall not unreasonably withhold, delay, or condition its consent with respect to the existence of good reason. If Spectrum and Hanmi cannot agree on the existence of good reason in any country(ies), such disagreement shall be referred to their respective chief executive officers for resolution. If the chief executive officers of the Parties are unable to resolve the disagreement within ninety (90) days of the matter being referred to them, such matter shall be resolved in accordance with Section 11.4(b); provided, that if the arbitrator decides that good reason does not exist in any country(ies), then Spectrum may, at its sole option, either pay the termination fee set forth above or withdraw the termination notice and continue development and commercialization of the Products in such country(ies) under this Agreement. 1.3 Effect of Expiration or Termination. (a) Effect of Expiration. Upon expiration (but not earlier termination) of this Agreement, the License shall survive on a fully-paid, royalty-free, irrevocable, perpetual basis, and all other rights and obligations of the Parties under this Agreement shall terminate, except as provided elsewhere in this Section 9.3. (b) Effect of Termination. 27. (i) Upon any termination of this Agreement, except by Spectrum under Section 9.2(b), (i) Spectrum will remain responsible for any payment obligations due to Hanmi through the termination date, (ii) Spectrum will assign to Hanmi any and all Regulatory Approvals and Regulatory Filings as well as all data and information obtained in pursuing Regulatory Approvals for the Products; and (iii) the License will terminate immediately; provided, that Spectrum will be allowed to sell any remaining inventory of Products in Spectrum’s possession as of the date of termination. (ii) If Spectrum terminates this Agreement pursuant to Section 9.2(d) with respect to specific Terminated Countries, then (i) this Agreement shall remain in full force and effect in all countries other than the Terminated Countries, (ii) all of the consequences set forth in this Section 9.3, including references to Spectrum Territory, shall apply solely with respect to the Terminated Countries, and (iii) Spectrum’s rights under Section 2.1 to research, develop, manufacture, have manufactured Products in the Terminated Countries shall continue on a non-exclusive basis solely for commercialization of such Product in the Field in the remaining Spectrum Territory. (c) Confidential Information. Upon expiration or termination of this Agreement in its entirety, except to the extent that a Party retains a license from the other Party as provided in this Article 9, each Party shall promptly return to the other Party, or delete or destroy, all relevant records and materials in such Party’s possession or control containing Confidential Information of the other Party; provided that such Party may keep one copy of such materials for archival purposes only subject to a continuing confidentiality obligations. (d) Accrued Obligations; Survival. Neither expiration nor any termination of this Agreement shall relieve either Party of any obligation or liability accruing prior to such expiration or termination, nor shall expiration or any termination of this Agreement preclude either Party from pursuing all rights and remedies it may have under this Agreement, at law or in equity, with respect to breach of this Agreement. In addition, the Parties’ rights, and obligations under Sections 1 (to the extent the definitions are applicable to surviving obligations), 2.3, 4.2, 4.3, 5.1-5.4, 5.5, 5.6 (in each case with respect to obligations accrued prior to termination), 6, 7, 8.1, 9.3, 10 and 11 of this Agreement shall survive expiration or any termination of this Agreement. 1.4 Rights Upon Bankruptcy. All rights and licenses granted under or pursuant to this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title 11 of the United States Code (“Section 365(n)”) and other similar laws in any jurisdiction outside the U.S. (collectively, the “Bankruptcy Laws”), licenses of rights to be “intellectual property” as defined under the Bankruptcy Laws. If a case is commenced during the Term by or against a Party under the Bankruptcy Laws then, unless and until this Agreement is rejected as provided in such Bankruptcy Laws, such Party (in any capacity, including debtor-in-possession) and its successors and assigns (including a trustee) shall perform all of the obligations provided in this Agreement to be performed by such Party. If a case is commenced during the Term by or against a Party under the Bankruptcy Laws, this Agreement is rejected or not assumed as provided in the Bankruptcy Laws and the other Party elects to retain its rights hereunder as provided in the Bankruptcy Laws, then the Party subject to such case under the Bankruptcy Laws (in any capacity, including debtor-in-possession) and its successors and assigns (including a Title 11 trustee), shall provide to the other Party copies of all Information necessary for such other Party to prosecute, maintain and enjoy its rights under the terms of this Agreement promptly upon such other Party’s written request therefor. All rights, powers and remedies of the non-bankrupt Party as provided herein are in addition to and not in substitution for any and all other rights, powers and remedies now or hereafter existing at law or in equity (including the Bankruptcy Laws) in the event of the commencement of a case by or against a Party under the Bankruptcy Laws. Section 365(n) and the terms of this Section 9.4 shall apply and shall be enforced in and by every court, tribunal, arbitrator, regulatory body, or official resolving disputes between the Parties with respect to rights in intellectual property, whether such court, tribunal, arbitrator, regulatory body, or official is located in the U.S. or in any other nation or jurisdiction. 10. Indemnification. 1.1 Spectrum Indemnified by Hanmi. Hanmi shall indemnify and hold Spectrum harmless from and against any liabilities or obligations, damages, losses, claims, encumbrances, costs or expenses 28. (including reasonable attorneys’ fees) (any or all of the foregoing herein referred to as a “Loss”) insofar as a Loss or actions in respect thereof, whether existing or occurring prior to, on or subsequent to the Effective Date, arises out of or is based upon (a) any misrepresentation or breach by Hanmi of any of its representations, warranties, covenants or obligations under this Agreement; or (b) any claims that the Licensed Technology, Compound or a Product, or the use thereof by Spectrum under this Agreement infringes a patent, trademark or proprietary right of a third party; or (c) the gross negligence, willful misconduct or violation of Applicable Laws by Hanmi, its Affiliates, licensors, contractors, distributors or their respective officers, directors, employees, consultants or authorized agents. 1.2 Hanmi Indemnified by Spectrum. Spectrum shall indemnify and hold harmless Hanmi from and against any Loss insofar as such Loss or actions in respect thereof occurs subsequent to the Effective Date, whether existing or occurring prior to, on or subsequent to the date hereof, arises out of or is based upon (a) any misrepresentation or breach of any of the warranties, covenants or agreements made by Spectrum in this Agreement or (b) the gross negligence, willful misconduct or violation of applicable laws by Spectrum, its Affiliates, licensors, contractors, distributors or their respective officers, directors, employees, consultants or authorized agents. 1.3 Indemnification Procedure. If a Party entitled to indemnification under this article (an “Indemnified Party”) makes an indemnification request to the other, the Indemnified Party shall permit the other Party (the “Indemnifying Party”) to control the defense, disposition or settlement of the matter at its own expense; provided that the Indemnifying Party shall not, without the consent of the Indemnified Party, enter into any settlement or agree to any disposition that imposes any conditions or obligations on the Indemnified Party. The Indemnified Party shall notify the Indemnifying Party promptly of any claim for which the Indemnifying Party is responsible and shall reasonably cooperate with the Indemnifying Party to facilitate defense of any such claim. An Indemnified Party shall at all times have the option to participate in any matter or litigation, including but not limited to participation through counsel of its own selection, if desired, the hiring of such separate counsel being at Indemnified Party’s own expense. 1.4 Insurance. Each Party, at its own expense, shall maintain product liability and other appropriate insurance (or self-insure) in an amount consistent with sound business practice and reasonable in light of its obligations under this Agreement during the Term. Each Party shall provide a certificate of insurance (or evidence of self-insurance) evidencing such coverage to the other Party upon request. 29. 11. Miscellaneous. 1.1 Force Majeure. If and to the extent a Party’s performance of any of its obligations pursuant to this Agreement is prevented, hindered or delayed by fire, flood, earthquake, elements of nature or acts of God, acts of war, terrorism, riots, civil disorders, rebellions or revolutions, or any other similar cause beyond the reasonable control of such Party (each, a “Force Majeure Event”), and such non- performance, hindrance or delay could not have been prevented by reasonable precautions, then the non-performing, hindered or delayed Party shall be excused for such non-performance, hindrance or delay, as applicable, of those obligations affected by the Force Majeure Event for as long as such Force Majeure Event continues and such Party continues to use its best efforts to recommence performance whenever and to whatever extent possible without delay, including through the use of alternate sources, workaround plans or other means. The Party whose performance is prevented, hindered, or delayed by a Force Majeure Event shall immediately notify the other Party of the occurrence of the Force Majeure Event and describe in reasonable detail the nature of the Force Majeure Event. 1.2 Relationship of the Parties. Each Party is performing its obligations hereunder as an independent contractor, and not as an employee, agent, joint venturer, or partner of the other Party, and has no authority to bind the other Party by contract or otherwise. Each Party acknowledges and agrees that its personnel are not eligible for or entitled to receive any compensation, benefits, or other incidents of employment that the other Party makes available to its employees. Each Party is solely responsible for all taxes, expenses, withholdings, and other similar statutory obligations arising out of the relationship between such Party and its personnel and the performance of services by such personnel. 1.3 Notices. Any notice required or permitted to be given under this Agreement shall be in writing, shall specifically refer to this Agreement, and shall be addressed to the appropriate Party at the address specified below or such other address as may be specified by such Party in writing in accordance with this Section 11.3, and shall be deemed to have been given for all purposes when received, if hand- delivered or by means of facsimile or other electronic transmission, or one Business Day after being sent by a reputable overnight delivery service. If to Spectrum, addressed to: Spectrum Pharmaceuticals, Inc. 11500 South Eastern Ave. Suite 240 Henderson, NV 89052 Attn: Legal Department Telephone number: (702) 835-6300 Facsimile number: (702) 260-7405 With a copy to: Stradling Yocca Carlson & Rauth 660 Newport Center Dr, Suite 1600 Newport Beach, CA 92660 Attn: Marc G. Alcser, Esq. Telephone number: (949) 725-4000 Facsimile number: (949) 725-4100 If to Hanmi: Hanmi Pharmaceuticals Co., Ltd. 14, Wiryeseong-daero, Songpa-gu Seoul, 138-724, Korea Attn: Global Business Development Team Telephone: (2) 410-0492 Facsmile: (2) 410-9079 1.4 Disputes; Governing Law and Jurisdiction. 30. (a) In the event of any controversy or claim arising from or relating to any provision of this Agreement, or any term or condition hereof, or the performance by a party of its obligations hereunder, or its construction or its actual or alleged breach, the parties will try to settle their differences amicably between themselves in negotiations between designated executives of Hanmi and Spectrum. Either party may provide written notice of a dispute to the other party, and the designated officers of each party will thereafter promptly meet to attempt to resolve that dispute. (b) Any dispute which is not resolved as provided in subsection (a) above, will be settled by final and binding arbitration before a single arbitrator in Hawaii. The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures. The award rendered thereon by the arbitrator shall be final and binding on the parties thereto, and judgment thereon may be entered in any court of competent jurisdiction. The prevailing party shall be entitled to recover from the losing party reasonable attorney’s fees, expenses, and costs. In no event will the arbitrator have any right or power to award punitive or exemplary damages. (c) In the event of a dispute under Section 3.1(d), the arbitrator shall have at least ten (10) years’ experience in managing or overseeing drug development and licensing activities. (d) This Agreement shall be construed and enforced in accordance with the laws of the State of New York, USA, without reference to its choice of law principles. Furthermore, the Parties expressly waive the application of the United Nations Conventions on Contracts for the International Sale of Goods to this Agreement. 1.5 Assignment. Neither Party hereto may assign or otherwise transfer this Agreement (by operation of law or otherwise), in whole or in part, without the other Party’s prior written consent. Notwithstanding the foregoing, either Party may, without the other’s prior written consent, assign or transfer this Agreement by way of change in control, merger, acquisition, or sale of all or substantially all of the assets or securities of such Party to any third party. In the event of a permitted transfer or assignment of this Agreement in its entirety, the obligations and rights hereunder shall be binding upon and inure to the benefit of the successors and assigns of the parties. 1.6 Entire Agreement. This Agreement, and the Exhibits hereto, sets forth the entire understanding and agreement between the parties with respect to the subject matter hereof, and supersedes and replaces any prior understanding, agreement, or statement, written or oral, with respect to the same. No provision of the Agreement shall be construed to confer any rights or remedies on any person other than parties hereto. 1.7 Modification. This Agreement and the Exhibits hereto, shall not be modified except by a writing signed on behalf of each of the parties hereto. 1.8 Severability. If any term, provision, covenant, or condition of this Agreement is found by a court of competent jurisdiction to be invalid, void or unenforceable, then such term, provision, covenant or condition shall be deemed to be stricken from this Agreement and the remainder of this Agreement shall remain in full force and effect and shall in no way be effected, impaired or invalidated thereby. 1.9 Interpretation. The headings of clauses contained in this Agreement preceding the text of the sections, subsections and paragraphs hereof are inserted solely for convenience and ease of reference only and shall not constitute any part of this Agreement, or have any effect on its interpretation or construction. All references in this Agreement to the singular shall include the plural where applicable. Unless otherwise specified, references in this Agreement to any Article shall include all Sections, subsections and paragraphs in such Article, references to any Section shall include all subsections and paragraphs in such Section, and references in this Agreement to any subsection shall include all paragraphs in such subsection. The word “including” and similar words means including without limitation. The word “or” means “and/or” unless the context dictates otherwise because the subject of the conjunction are mutually exclusive. The words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision. 31. All references to days in this Agreement shall mean calendar days, unless otherwise specified. Ambiguities and uncertainties in this Agreement, if any, shall not be interpreted against either Party, irrespective of which Party may be deemed to have caused the ambiguity or uncertainty to exist. This Agreement has been prepared in the English language and the English language shall control its interpretation. In addition, all notices required or permitted to be given hereunder, and all written, electronic, oral, or other communications between the Parties regarding this Agreement shall be in the English language. 1.10 Counterparts. This Agreement may be executed in counterparts, including by transmission of facsimile or PDF copies of signature pages to the Parties or their representative legal counsel, each of which shall be deemed an original document, and all of which, together with this writing, shall be deemed one instrument. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 32. In Witness Whereof, die Parties hereto have duly executed this License, Development and Supply Agreement as of the Effective Date. Hanmi Pharmaceuticals Co., Ltd. Spectrum Pharmaceuticals, Inc. By: /s/ Gwan Sun Lee By: /s/ Rajesh C Shrotriya MD Name: Gwan Sun Lee Name: Rajesh C Shrotriya MD Title: President & CEO Title: Chairman & CEO Signature Page to License, Development and Supply Agreement EXHIBIT 1.48 [***] EXHIBIT 1.51 [***] EXHIBIT 3.1(d) Development Activities EXHIBIT 3.4(c) [***] [***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded information is not material and the registrant customarily and actually treats as private and confidential. FIRST AMENDMENT TO LICENSE AGREEMENT This FIRST AMENDMENT TO THE LICENSE, DEVELOPMENT AND SUPPLY AGREEMENT (this “First Amendment”) is made and effective as of February 28, 2018 (the “First Amendment Effective Date”) by and between Spectrum Pharmaceuticals Inc., a Delaware corporation (“Spectrum”) and Hanmi Pharmaceuticals Co., Ltd., a company incorporated under the laws of the Republic of Korea (“Hanmi”). In this First Amendment, Hanmi and Spectrum each may be referred to individually as a “Party” and together as the “Parties.” WHEREAS, Spectrum and Hanmi are parties to that certain License, Development and Supply Agreement, dated October 8, 2014 (the “License Agreement”), pursuant to which Hanmi granted to Spectrum an exclusive license under the Licensed Technology to develop and commercialize Products in the Field in the Spectrum Territory (each as defined in the License Agreement); and WHEREAS, the Parties wish to revise the terms of the License Agreement with respect to the milestone payments payable by Spectrum to Hanmi upon the occurrence of certain events, as set forth below: NOW THEREFORE, in consideration of the foregoing premises and the mutual promises, covenants, and conditions contained in this First Amendment, the Parties agree as follows: 1. Unless otherwise indicated, capitalized terms used but not defined herein shall have the meanings set forth in the License Agreement. 2. Amendment of Section 4.2 of the License Agreement. Section 4.2 of the License Agreement (“Milestone Payments”) is hereby amended by deleting such section in its entirety and substituting the following in lieu thereof: for avoidance of doubt, the terms and conditions of this First Amendment shall prevail over any conflicting provisions, if any, under the existing License Agreement: 4.2 Milestone Payments. (a) Payments. (i) Payments Based on Marketing Approval. Upon the first Marketing Approval for a Product by the FDA for any indication, a milestone payment of US$[***] shall be payable to Hanmi. Spectrum shall promptly inform Hanmi of such first Marketing Approval, and shall pay the US$[***] milestone payment within [***] after receipt of an invoice from Hanmi for such payment. (ii) Payments Based on Net Sales During a Calendar Year. If, during any calendar year during the Term, the Net Sales of the Products equal or exceed any of the thresholds set forth in Table 4.2 below, the corresponding milestone payment shall be payable by Spectrum to Hanmi in accordance with the procedures set forth in Section 4.2(b): CONFIDENTIAL 1 Table 4.2: Annual Net Sales Milestone Payment Schedule Milestone Event Milestone Payment Cumulative Net Sales of the Product(s) equals or exceeds US$[***] during a calendar year US[***] Cumulative Net Sales of the Product(s) equals or exceeds US$[***] during the calendar year US$[***] Cumulative Net Sales of the Product(s) equals or exceeds US$[***] during the calendar year US$[***] Cumulative Net Sales of the Product(s) equals or exceeds US$[***] during the calendar year US$[***] Cumulative Net Sales of the Product(s) equals or exceeds US$[***] during the calendar year US$[***] For the avoidance of doubt, each of the milestone payments described in Table 4.2 above shall not be paid more than once with respect to in any calendar year during the Term. (b) Payment Procedures. Within [***] after the end of each calendar quarter during the Term in which there are Net Sales of a Product, Spectrum shall provide to Hanmi a report identifying (i) the Net Sales of the Product(s) during such preceding calendar quarter, and (ii) the cumulative year-to-date Net Sales of all Products during that calendar year. After receipt of such report, Hanmi shall promptly submit its invoice to Spectrum for any milestone payment(s) earned during the calendar quarter covered by the report based on Table 4.2 above. Spectrum shall pay the milestone payment to Hanmi within [***] after receipt of Hanmi’s invoice. (c) Example. By way of example, assuming that FDA Marketing Approval for a Product is received on February 1, 2020, and that Net Sales of the Product during the remainder of calendar year 2020, calendar year 2021, and calendar year 2022 are as shown below, the milestone payments due to Hanmi for those periods would be as follows: Calendar Quarter Net Sales in Calendar Quarter Cumulative Net Sales in Calendar Year (USS) Milestone Payment to Hanmi After End of Quarter (USS) Q1 2020 $[***] $[***] $[***] Q2 2020 $[***] $[***] [***] Q3 2020 $[***] $[***] [***] Q4 2020 $[***] $[***] $[***] Q1 2021 $[***] $[***] [***] Q2 2021 $[***] $[***] $[***] Q3 2021 $[***] $[***] $[***] CONFIDENTIAL 2 Calendar Quarter Net Sales in Calendar Quarter Cumulative Net Sales in Calendar Year (USS) Milestone Payment to Hanmi After End of Quarter (USS) Q4 2021 $[***] $[***] $[***] Q1 2022 $[***] $[***] $[***] Q2 2022 $[***] $[***] $[***] Q3 2022 $[***] $[***] $[***] Q4 2022 $[***] $[***] $[***] 3. Continuing Effect. Except as specifically amended by this First Amendment, the License Agreement shall remain in full force and effect in accordance with its terms. Sections or other headings contained in this First Amendment are for reference purposes only and shall not affect in any way the meaning or interpretation of this First Amendment. 4. Counterparts. This First Amendment may be executed in counterparts with the same force and effect as if each of the signatories had executed the same instrument. [Signature Page Immediately Follows] CONFIDENTIAL 3 IN WITNESS WHEREOF, the Parties have executed this First Amendment as of the Effective Date. SPECTRUM PHARMACEUTICALS, INC. HANMI PHARMACEUTICALS CO., LTD. By: /s/ Joseph W. Turgeon By: /s/ Se Chang Kwon Name: Joseph W. Turgeon Name: Se Chang Kwon Title: President, Ceo Title: CEO Date Signed: 2-28-2018 Date Signed: 28 Feb. 2018 CONFIDENTIAL 4 [***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded information is not material and the registrant customarily and actually treats as private and confidential. SECOND AMENDMENT TO LICENSE AGREEMENT - ROLONTIS This SECOND AMENDMENT TO LICENSE, DEVELOPMENT AND SUPPLY AGREEMENT - ROLONTIS (this “Second Amendment”) is made and effective as of January 1st, 2022 (the “Second Amendment Effective Date”) by and between Spectrum Pharmaceuticals Inc., a Delaware corporation (“Spectrum”) and Hanmi Pharmaceuticals Co., Ltd., a company incorporated under the laws of the Republic of Korea (“Hanmi”). In this Second Amendment, Hanmi and Spectrum each may be referred to individually as a “Party” and together as the “Parties.” WHEREAS, Spectrum and Hanmi are parties to that certain License, Development and Supply Agreement, dated October 8, 2014, as amended by that certain First Amendment dated February 28, 2018 (the “License Agreement”), pursuant to which Hanmi granted to Spectrum an exclusive license under the Licensed Technology to develop and commercialize Products in the Field in the Spectrum Territory (each as defined in the License Agreement); and WHEREAS, the Parties wish to revise the terms of the License Agreement with respect to the milestone payments and royalty payments payable by Spectrum to Hanmi upon the occurrence of certain events, as set forth below: NOW THEREFORE, in consideration of the foregoing premises and the mutual promises, covenants, and conditions contained in this Second Amendment, the Parties agree as follows: 1. Unless otherwise indicated, capitalized terms used but not defined herein shall have the meanings set forth in the License Agreement. 2. Amendment of Section 4.2 of the License Agreement. Section 4.2 of the License Agreement (“Milestone Payments”) is hereby amended by deleting Section 4.2(a)(i) in its entirety; for the avoidance of doubt, the terms and conditions of this Second Amendment shall prevail over any conflicting provisions, if any, under the existing License Agreement. 3. Amendment of Section 4.3 of the License Agreement. Section 4.3 of the License Agreement (“Royalty Payments”) is hereby amended by deleting Section 4.3(a) in its entirety and substituting the following in lieu thereof; for the avoidance of doubt, the terms and conditions of this Second Amendment shall prevail over any conflicting provisions, if any, under the existing License Agreement: 4.3 Royalty Payments. (a) Royalty Rate. Subject to the terms and conditions of the License Agreement, Spectrum shall pay to Hanmi a flat [***] on aggregate Annual Net Sales (whether such aggregate Annual Net Sales are achieved by Spectrum or any of its Affiliates or Sublicenses). In addition to the foregoing, beginning from Year 3 (as defined below) after the Commercial Launch of the Product, Spectrum shall pay to Hanmi an additional [***] on aggregate Annual Net Sales (whether such aggregate Annual Net Sales are achieved by Spectrum or any of its Affiliates or Sublicensees) (the “Supplemental Royalty”). The Supplemental Royalty will terminate once the aggregate payments made to Hanmi as a result of the Supplemental Royalty meet US $[***]. For the avoidance of doubt, Year 1 means the period from the date of the Commercial Launch of the Product to the last day of the calendar year following the year which includes such CONFIDENTIAL 1 Commercial Launch; Year 2 means the calendar year following Year 1; and Year 3 means the calendar year following Year 2. For the avoidance of doubt, and by way of example for clarity in calculating the royalties, assuming that the Commercial Launch date is July 1, 2022, the royalties shall be calculated as follows: Years from Commercial Launch Total Royalty Years 1-2 (From July 1,2022 to December 31, 2024) [***] Beginning from Year 3, continuing until cumulative the Supplemental Royalties amount meets US $[***] (From January 1, 2025) [***] [***] At all times after cumulative Supplemental Royalties have met US $[***] [***] 4. Continuing Effect. Except as specifically amended by this Second Amendment, the License Agreement shall remain in full force and effect in accordance with its terms. Sections or other headings contained in this Second Amendment are for reference purposes only and shall not affect in any way the meaning or interpretation of this Second Amendment. 5. Counterparts. This Second Amendment may be executed in counterparts with the same force and effect as if each of the signatories had executed the same instrument. [Signature Page Immediately Follows] CONFIDENTIAL 2 IN WITNESS WHEREOF, the Parties have executed this Second Amendment to License, Development and Supply Agreement - Rolontis as of the Second Amendment Effective Date. SPECTRUM PHARMACEUTICALS, INC. HANMI PHARMACEUTICALS CO., LTD. By: /s/ Thomas Riga By: /s/ Se-Chang Kwon Name: Thomas Riga Name: Se-Chang Kwon Title: President and CEO Title: CEO CONFIDENTIAL 3 [***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded information is not material and the registrant customarily and actually treats as private and confidential. SUPPLY AGREEMENT This Supply Agreement (the “Agreement”) is entered into as of February 28, 2018 (the “Effective Date”) by and between Spectrum Pharmaceuticals Inc., a Delaware corporation (“Spectrum”) and Hanmi Pharmaceuticals Co., Ltd., a company incorporated under the laws of the Republic of Korea (“Hanmi”). In this Agreement, Hanmi and Spectrum each may be referred to individually as a “Party” and together as “Parties.” RECITALS Whereas, Hanmi and Spectrum are parties to that certain License. Development and Supply Agreement, dated October 8, 2014 (the “License Agreement”), pursuant to which Spectrum has the exclusive rights to develop and commercialize the products that contain the Compound (as defined in the License Agreement); Whereas, Spectrum and Hanmi desire to have Hanmi manufacture and supply commercial-scale products for distribution and sale by Spectrum, subject to the terms and conditions of this Agreement. NOW, THEREFORE, the Parties agree as follows: AGREEMENT 1. Definitions. For purposes of this Agreement, the defined terms shall have the meanings defined in the License Agreement unless defined below: “Additional Purchase Orders” has the meaning stated in Section 2.1.4. “Batch” means the defined quantity of a Product that (a) is intended to have uniform character and quality within specified limits, and (b) is Produced in a single manufacturing cycle. “Batch Record” means the fully executed production batch record with attachments and test records that allows for the assessment and quality assurance release of the Product and intermediates (that is, GCSF intermediate and LAPS carrier). “BLA” has the meaning stated in Section 2.1.2. “Components” means all critical raw materials (such as PEG, polysorbate 80 and cyanoborohydride. and any single-source starting materials), master ceil banks and long-lead time parts (such as vials, plungers, stoppers and syringes) used by Hanmi in the Production of the Product under this Agreement. “Compound” has the meeting set forth in Section 1.17 of the License Agreement. “COG” has the meaning set forth in Section 1.12 of the License Agreement. “Damages” means any and all costs, losses, claims, actions, liabilities, fines, penalties, costs and expenses, court costs, and fees and disbursements of counsel, consultants and expert witnesses incurred by a Party hereto (including interest which may be imposed in connection therewith). “Defaulting Party” has the meaning stated in Section 8.2.1. 1 “Delivery Date” means the date that the Saleable Product is, or is to be, (depending on context) delivered to Spectrum. “Drug Substance” means the frozen bulk drug substance form of the Compound: that is, the form of the Compound after conjugation and purification. “Effective Date” means the date of this Agreement as set forth above. “Facility” means Hanmi’s manufacturing facility located at Chupal Industrial Complex, 114 Chupalsandan-ro, Paengseong-eup, Pyeonglaek-si, Gyeonggi-do, 17998, Republic of Korea. “FDA” has the meaning set forth in Section 1.26 of the License Agreement. “FDA Approval” has the meaning set forth in Section 2.1.3. “Indemnified Party” has the meaning stated in Section 6.3. “Indemnifying Party” has the meaning stated in Section 6.3. “Loss” has the meaning stated in Section 6.1. “Master Batch Record” means, with respect to each Batch of the Product to be Produced hereunder, a formal set of instructions for the Production of each Batch of such Product. “Nonconforming Product” has the meaning stated in Section 3.1. “Non-Defaulting Party” has the meaning stated in Section 8.2.1. “Party” or “Parties” has the meaning stated in the opening paragraph. “Person” means a natural person, a corporation, a partnership, a trust, a joint venture, a limited liability company, any governmental authority or any other entity or organization. “Post-Approval Purchase Order” has the meaning stated in Section 2.1.3. “Post-Filing Purchase Order” has the meaning stated in Section 2.1.2. “Pre-Agreed Purchase Orders” has the meaning stated in Section 2.1.3. “Pre-Filing Purchase Order” has the meaning stated in Section 2.1.1. “Produce” or “Production” means, as applicable, the manufacturing, inspecting, and testing of the Saleable Product by Hanmi in accordance with the Master Batch Record. “Product” means the pharmaceutical preparation of the Compound now known as Eflapegrastim, to be Produced and delivered by Hanmi in the Drug Substance form. “Product Requirements” has the meaning stated in Section 3.1. “Product Specifications” has the meaning set forth in the License Agreement and shall include the Release Specifications and Shelf Life Specifications; provided, that the Product Specifications need not be attached to the Quality Agreement. “Purchase Option” has the meaning stated in Section 2.1.5. 2 “Purchase Order” means such form of purchase order or document by which orders for the Product will be placed by Spectrum pursuant to the terms of this Agreement; provided, that the terms and conditions of this Agreement will be controlling over any terms and conditions included in any Purchase Order and any term Or condition of such Purchase Order that is: different from or contrary to the terms and conditions of this Agreement will be void. “Quality Agreement” means that certain Quality Agreement, dated February 5, 2016 for the Product between Hanmi and Spectrum. “Regulatory Approval” means all authorizations by the appropriate Regulatory Authority necessary for commercial sale in a jurisdiction, including without limitation, approval of labeling, price, reimbursement and Production. “Release Specifications” means the Product Specifications mutually agreed by the Parties with which the Product shall comply at the time of release. “Released Executed Batch Record” means the completed batch record and associated deviation reports, Certificate of Analysis and Certificate of Compliance created for each Batch of Product. “Saleable Product” means the Product manufactured according to the Master Batch Record, which meets all the Product Specifications, has been stored at -70°C after manufacture and. at the time of delivery to Spectrum, has no less than 22 months Shelf Life remaining, “Shelf Life” means the established duration of time that the Product is purported to meet all Shelf Life Specifications. “Shelf Life Specifications” means the Product Specifications that the Product should continue to meet after release up to and including the established expiration date of the Product. “Spectrum Territory” shall have the meaning set forth in Section 1.77 of the License Agreement. “Stockpiled Amount” means the amount of the Saleable Product available at Hanmi ninety days after the FDA Approval, which has not already been ordered through binding Purchase Orders by Spectrum and that was manufactured prior to the FDA approval of the BLA. “Supply Deficiency” means a failure by Hanmi to produce by the relevant Delivery Date the quantity of Product at least equal to the amount specified in the relevant Purchase Order. “Term” has the meaning stated in Section 8.1. “Testing Standards and Procedures” means, with respect to the Product Produced hereunder, the written standards and procedures for evaluating compliance with the applicable Product Specifications, as mutually agreed upon in writing by Spectrum and Hanmi. 3 2. Purchase and Supply of Product. 1.1 Agreement to Purchase and Supply. Pursuant to the terms and conditions of this Agreement, Spectrum will purchase the Product from Hanmi, and Hanmi will Produce the Product for Spectrum, The Product will be ordered, supplied, and purchased as follows: 1.1.1 Pre-Filing Purchase Order. No more than [***] following the execution of this Agreement. Spectrum shall issue an irrevocable binding Purchase Order for no less than [***] of the Product (the “Pre-Filing Purchase Order”), and Hanmi shall Produce and deliver the ordered amount of the Saleable Product no later than December 31, 2018, at a purchase price of $[***]. 1.1.2 Post-Filing Purchase Order. No more than [***] following the filing of the Eflapegrastim BLA (the “BLA”) with the FDA. Spectrum shall issue an irrevocable binding Purchase Order for no less than [***] of the Product (the “Post-Filing Purchase Order”), and Hanmi shall Produce and deliver the ordered amount of the Saleable Product no later than 12 months from the date of issue, or December 31, 2019, whichever is later at a purchase price of $[***]. 1.1.3 Post-Approval Purchase Order. No more than [***] following the approval (licensure) of the BLA by the FDA (the “FDA Approval”). Spectrum shall issue an irrevocable binding Purchase Order for no less than [***] of the Product (the “Post- Approval Purchase Order, and together with the Pre-Filing Purchase Order, the Post-Filing Purchase Order, the “Pre-Agreed Purchase Orders”), and Hanmi shall Produce and deliver the ordered amount of the Saleable Product no later than 12 months from the date of issue, or December 31, 2020 whichever is later, at a purchase price of $[***]. 1.1.4 Additional Purchase Orders. From time to time, Spectrum may issue additional Purchase Orders for the Product in addition to the Pre-Agreed Purchase Orders, during the calendar years 2018 through 2020, with a Delivery Date no sooner than [***] from the date of such Purchase Order (the “Additional Purchase Orders”). Hanmi shall make best efforts to Produce and supply the amount of the Saleable Product ordered in any such Additional Purchase Order al a purchase price of $[***]. 1.1.5 Spectrum Option. After the periods described in Sections 2.1.1, 2.1.2 and 2.1.3, Spectrum shall have the option to issue Purchase Order(s) io purchase [***] of the Product prior to the first anniversary after the FDA Approval, [***] of the Product after the first anniversary but prior to the second anniversary after the FDA Approval and [***] of the Product after the second anniversary but prior to the third anniversary after the FDA Approval (the “Purchase Option”); provided, that Spectrum shall provide no less than [***] notice of its intention to exercise the Purchase Option, If Spectrum exercises the Purchase Option, Spectrum shall issue an irrevocable binding Purchase Order lor the applicable amount of the Product set forth above, and Hanmi shall Produce and deliver the ordered amount of the Saleable Product no later than [***] from the date of issue of the Purchase Order, at a purchase price of $[***]. 1.1.6 Post-Approval Stockpile “Put” Option. In order to provide an incentive for Hanmi to manufacture additional quantities of the Product, and to provide incentive for Spectrum to place timely Purchase Orders, within [***] after the FDA Approval. Hanmi shall supply to Spectrum, and Spectrum shall have the obligation to purchase, the Stockpiled Amount not to exceed [***] grams, at a purchase price of $[***]. If Stockpiled Amount exceeds [***], Spectrum has the option, but not the obligation, to purchase additional amounts at the agreed terms. For the avoidance of doubt, given that Pre-Agreed Purchase Orders must be provided according io the events above, and that Additional Purchase Orders require a minimum of [***] lead-time, any Purchase Orders issued in [***] prior to the FDA Approval shall be considered part of the Stockpiled Amount and shall be supplied at $[***]. 1.1.7 True Up. Within [***] after the FDA Approval, Hanmi has the option to request reimbursement of Hanmi’s manufacturing costs, if the average COG exceeds $[***] for all Batches of the Product delivered to Spectrum (including the Stockpiled Amount), provided, that, even if the average COG exceeds $[***], Spectrum shall be under an obligation to reimburse only that much of the average COG in excess of $[***] such that Spectrum’s average purchase price does not exceed $[***] for the Saleable Product delivered by Hanmi. In the event that Hanmi exercises this option, Spectrum 4 shall have the right, at its own expense, to audit Hanmi’s determination of COG l or the avoidance of doubt, expenses for the 2018 calendar year shall be prorated starting at February 1,2018. Hanmi shall keep complete, fair, and true books of accounts and records for the purpose of determining COG. Spectrum shall have the right to cause an independent, certified public accountant to audit such records to confirm COG, Such audits may be exercised during normal business hours upon reasonable prior written notice to Hanmi Spectrum shall bear the cost of the audit unless the audit reveals that COG did not exceed $[***] in which case Hanmi shall reimburse the cost of the audit to Spectrum. 1.1.8 Subsequent Purchase Orders. After the third anniversary of the FDA Approval, Spectrum may, from time to time, issue additional Purchase Orders. Such Purchase Orders shall be subject to acceptance by Hanmi if Hanmi accepts such Purchase Orders. Hanmi shall deliver the Saleable Products in accordance with the terms of the Purchase Order and this Agreement. The purchase price for the Saleable Products delivered under such Purchase Orders shall be mutually negotiated and agreed upon by the Parties upon issuance of a Purchase Order by Spectrum; provided, that both Parties will use reasonable efforts to reduce COG (including, but not limited to, Spectrum’s efforts to acquire all relevant regulatory approvals for the Product). Other than the obligation to purchase Saleable Product under the Pre-Agreed Purchase Orders and Stockpiled Amount, Spectrum will have no minimum purchase obligations with respect to the Product 1.2 Performance. Hanmi will diligently perform the Production as provided in the Product Specifications and the Quality Agreement, and deliver the Saleable Product ordered by Spectrum Hanmi will Produce the Product in accordance with and meeting the Product Requirements. 1.3 Reproduction or Reprocessing. If during the Production of any Batch of a Product, any reprocessing or reproduction is permitted and required in order to meet the Product Specifications. Hanmi will conduct such reprocessing in compliance with CGMPs and the BLA. Any reprocessing, reproduction, or change which is not covered by CGMPs or the BLA must be approved in writing by Spectrum prior to Implementation. Hanmi will be responsible for all costs and expenses incurred in connection with any reprocessing or reproduction, unless it is due to a change to the Product Specifications requested or ordered by Spectrum or FDA or any other Regulatory Authority in Spectrum Territory in writing. 1.4 Capacity and Delivery. 1.1.1 Hanmi Capacity. Hanmi will maintain sufficient capacity to Supply no less than the amounts described herein during the Term of this Agreement unless otherwise agreed by the parties. 1.1.2 Delivery. Hanmi will ship the Products using such carriers as Spectrum may designate in the purchase orders or otherwise in writing to Hanmi. The Products supplied hereunder will be suitably packed for shipment and labeled for shipment to the address specified in Spectrum’s order. All shipments shall be FCA Hanmi Facility (Incoterms 2010), at which point, all title to, and risk of loss of, the Products shall pass to Spectrum or its designee. All freight, insurance, and other shipping expenses from the F.C.A., point shall be paid by Spectrum. 1.1.3 Timely Delivery. Hanmi agrees that time is of the essence with respect to the Delivery Dates set forth in Purchase Orders. Hanmi will use best efforts to meet all Delivery Dates set forth in valid Purchase Orders. Such efforts may include but not necessarily be limited to: (i) authorizing needed overtime (including weekend and holiday work) for its employees, (ii) adding additional staffing, (iii) adding additional shifts, (iv) scheduling Spectrum work in slots not then committed to other customers and (v) contacting other customers to inquire as to their flexibility to postpone usage of their production slot. Hanmi will promptly notify Spectrum with full details of any anticipated delay in delivery of Products beyond the Delivery Date set forth in any Purchase Order. If any delay is outside of the reasonable control of Hanmi and are unrelated to Hanmi’s negligent act or omission or due to Hanmi’s third party contractors or suppliers, then Hanmi and Spectrum shall agree to a reasonable apportionment between the Parties for the incremental cost (with no mark-up) of any additional efforts needed to deliver Products in a timely manner. Subject to any rights of Spectrum set forth in this Agreement, if Hanmi cannot meet the Delivery Date for Products set forth in a Purchase 5 Order despite using the efforts contemplated, the Parties will meet and attempt to agree on a reasonable timeline for delivery of the Products. 1.5 Supply Deficiencies. 1.1.1 Supply Deficiency. If there is a Supply Deficiency, Hanmi will immediately notify Spectrum and will fulfill Spectrum’s Purchase Orders under this Agreement no less favorably than that of any other client or the Products Produced for Hanmi’s internal use and cooperate with Spectrum in taking all actions that are reasonably necessary in order to remedy the Supply Deficiency. In addition, the Parties agree to discuss a resolution to the Supply Deficiency and, if a resolution reasonably satisfactory to Spectrum cannot be reached following a [***] cure period, then Spectrum will have the right to: 1.1.1.1 cancel, maintain, or decrease any outstanding Purchase Order that is beyond the portion of the order that Hanmi was able to timely produce, without any liability to Hanmi; or 1.1.1.2 require Hanmi, at its expense and risk, to deliver to Spectrum’s designee all Components; or 1.1.1.3 negotiate with Hanmi in further detail a possible remedy plan for the supply deficiency; and 1.1.1.4 should the Parties fail to reach a resolution under any provision above, said dispute shall be resolved per the dispute resolution process stipulated under Section 10.4 of this Agreement. 1.6 Changes to Production and Product Specifications. Hanmi agrees not to make any changes to Production or Product Specifications outside of those previously agreed with the Regulatory Authorities and Spectrum. In case changes to Production and or Product Specifications are warranted, Hanmi agrees to inform Spectrum in writing of such changes and provide all relevant data and rationale for the proposed changes. Spectrum will be given sufficient time to review the proposed changes and the data and rationale for such changes and to seek approval of Regulatory Authorities, if required. Hanmi will require written approval from Spectrum for changes to Production and/or Product Specifications prior to the Production of Products. All expenses related to such changes requested by Hanmi shall be borne solely by Hanmi. All expenses related to such changes requested by Spectrum shall be borne solely by Spectrum. 1.1.1 Regulatory Changes. If facility, equipment, process or system changes that are primarily attributable to the Production of Products are required of Hanmi as a result of requirements of the FDA or any other Regulatory Authority, and such regulatory changes apply primarily to the Production and supply of the Products, then Spectrum and Hanmi will review such requirements and agree in writing to such regulatory changes, while making every effort to avoid disruption of Product supply to Spectrum. If regulatory changes are attributable solely to the Production efforts owned and controlled by Hanmi, expenses related to such changes shall be borne solely by Hanmi. For all other regulatory changes, including regulatory changes that are attributable solely to decisions made by Spectrum or FDA or any other Regulatory Authority in Spectrum Territory, expenses related to such changes shall be borne solely by Spectrum. 1.7 Audit. Once per [***] and upon [***] days’ prior written notice Spectrum and each of its Sub-licensees will have the right to conduct an audit of that portion of the Facility used in the Production during normal business hours at the auditing party’s sole cost and expense; provided, that in the event the auditing party has identified any substantive, material quality issue involved with the Production of the Product, then the auditing party will be entitled to such reasonable number of additional follow-up audits as may be needed to confirm that the issue has been resolved. Spectrum will use reasonable efforts to conduct the annual audit jointly with its Sub-licensee(s). To the extent an annual audit is separately requested by a Sub-licensee. Spectrum will have the right to be present at such audit without affecting its right separately request an annual audit. The form, participants and procedures of the 6 audit will be determined by the auditing party, and disclosed to Hanmi at least [***] prior to the start of the audit. When conducting an audit, each of the auditing party’s representatives will (a) be subject to a nondisclosure obligation at least as restrictive as the obligations contained in Article 7; (b) follow such security and Facility access procedures as reasonably designated by Hanmi; and (c) use reasonable best efforts to avoid disrupting Hanmi’s operations. Hanmi will take appropriate actions to correct any deficiencies identified by such audit, taking into account any reasonable suggestions made by the auditing party. In addition to an audit by Spectrum, its Sub-licensees, and affiliated companies. Hanmi agrees to reasonably cooperate with applicable Regulatory Authorities and will permit reasonable Product-specific inspections by such Regulatory Authorities. 1.8 Recall. If Spectrum is required to recall any Product because such Product may violate local, state, or federal laws or regulations, the laws or regulations of any applicable foreign government or agency, or the Product Specifications, or in the event that Spectrum wishes to institute a voluntary recall then Spectrum shall first discuss such recall with Hanmi and will be responsible for coordinating such recall. Spectrum promptly will notify Hanmi if any Product is the subject of a recall and Hanmi will cooperate with Spectrum in connection with any recall. Spectrum will generally be responsible for all of the costs and responsible for the expenses of such recall if the cause of such recall is not attributable to any action taken by Hanmi; but Hanmi will be responsible for recall, product withdrawal or field correction costs and expenses, to the extent caused by the negligence or intentional acts of Hanmi or by Hanmi’s breach of its obligations, covenants and warranties under this Agreement, such as delivery by Hanmi of Nonconforming Product. In the event the responsible Party for the cause of a recall cannot be determined or both parties are responsible, Spectrum and Hanmi shall share the costs and expenses equally: provided, that if the proportional responsibility of each Party can be determined, then the Parties shall share the costs and expenses in proportion to their responsibility. 1.9 Product Testing. 1.1.1 Product Testing. Hanmi will test, or cause to be tested by third party testing facilities agreed upon in writing by Spectrum and Hanmi and audited by Hanmi, in accordance with Testing Standards and Procedures, each Batch of a Product Produced pursuant to this Agreement before delivery to Spectrum. Hanmi agrees that all the Products shall be tested and released into inventory within [***] of the end of Production. Concurrently with each shipment of the Products, Hanmi shall deliver to Spectrum the Released Executed Bach Records with all attachments including, without limitation, the Certificate of Analysis and Certificate of Compliance for each Batch of the Product included in the shipment confirming that the Product has been Produced in accordance with this Agreement. Hanmi further agrees to maintain a stability program sufficient to meet the shelf life and BLA requirements. 1.1.2 Testing. At Spectrum’s cost and expense, Spectrum or a party selected by Spectrum, may perform all testing required to be performed on Batches of Products delivered by Hanmi 1.10 Alternative Supplier. The relationship between the Parties shall be non-exclusive and Spectrum shall have the right to qualify and use alternative suppliers of the Product. Spectrum agrees to qualify any alternative suppliers at its own expense and employ its own subject matter experts. Upon Hanmi’s technology transfer to the third party supplier requested by Spectrum, said third party supplier shall use Hanmi’s technology so transferred for the sole and exclusive purpose of supplying Spectrum with the manufacturing services for Product and Spectrum shall ensure that any agreements with such suppliers include language to this effect. For avoidance of doubt, Hanmi will not be required to perform any technology transfer activities at an alternative supplier site that relates to the LAPS carrier and the master cell banks. In any case, Spectrum covenants to maintain any and all information pertaining to the manufacturing price as well as the master cell banks strictly confidential and to impose at least the same level of confidentiality obligation upon Spectrum’s third party suppliers). Spectrum shall be fully liable for any action and/or omission by an alternative third party supplier engaged by Spectrum. Notwithstanding the foregoing, Spectrum shall consider using Hanmi as its preferred supplier of the Product and/or LAPS carrier, under a separate agreement containing such terms and conditions as may be mutually agreed by the Parties. 7 3. Nonconforming Product. 1.1 Product Conformity. Within [***] from the date of delivery of both the Product and the Released Executed Batch Record to Spectrum, Spectrum will determine, based on agreed release testing procedures, whether such Product conforms to Product Specifications and the Master Batch Record (collectively the “Product Requirements”), if Spectrum establishes that any shipment of a Product does not conform to the Product Requirements (“Nonconforming Product”), then Spectrum will give Hanmi written notice thereof as soon as practicable but in no event later than [***] from the date of delivery of both the Product and the Released Executed Batch Record and will, unless otherwise directed by Hanmi, return only the Nonconforming Product for further testing by Hanmi. Failure to provide such written notice prior to the end of the [***] period will indicate that Spectrum has accepted the Product solely as having passed its ordinary course testing, but such acceptance will not waive Spectrum’s rights under this Article 3 with respect to latent defects (i.e. Nonconforming Product, the nonconforming nature of which is not discoverable within that [***] period) in Product or constitute a waiver of any rights Spectrum may have based on Hanmi’s warranties hereunder. Hanmi will use its best efforts to replace all rejected Product as soon as practicable, pending a determination as to whether the Product in question was rightfully rejected. If, after conducting its own testing. Hanmi agrees, or it is determined pursuant to Section 3.2. that the returned Product fails to meet Product Requirements and. to the extent that such failure is not due (in whole or in part) to acts or omissions attributable to Spectrum or any third party prior to or after delivery of such Product, the provisions of Section 3.3 will apply. If it is determined that the Product at issue meets the Product Requirements, then Spectrum shall be responsible for all costs and expenses incurred by Hanmi in relation to the testing conducted by Hanmi. 1.2 Disputes. If there is any dispute concerning whether the Product meets the Product Requirements and/or the reasons therefor, the Parties will designate an independent laboratory to determine whether or not the Product at issue meets the applicable Product Requirements. The decision of such independent laboratory will be in writing and will be binding on both Hanmi and Spectrum. The costs of such independent laboratory will be borne by the Parties equally; provided, that the Party that is determined to be incorrect in the dispute will be responsible for all such costs and will indemnify the prevailing Party for its share of the costs incurred. 1.3 Nonconforming Product. In the event the Product is determined to be Nonconforming Product (whether by agreement of Hanmi pursuant to Section 3.1 or by an independent laboratory pursuant to Section 3.2) all remaining available Nonconforming Product will be either returned to Hanmi or destroyed, at Hanmi’s option and cost, and Hanmi will promptly replace such Nonconforming Product at its own cost and expense and will use commercially reasonable efforts to replace such Nonconforming Product in a reasonable time: provided, however, if the nonconformity is not directly or indirectly due to any action or inaction of Hanmi, then the cost for replacement shall be Spectrum’s responsibility. 4. Price and Payment. 1.1 Product Price. Hanmi will invoice Spectrum for the applicable purchase price upon shipment of each released Batch of a Product, which shall be payable within [***] days of the receipt of the applicable shipment by Spectrum. Prices for the Products set forth herein are inclusive of all costs associated with Hanmi’s Production, acquiring Components, testing and analysis, storage and shipment and no additional charges or costs of any kind will be payable by Spectrum, unless specifically agreed to by Spectrum in writing in advance of the charge or cost being incurred by Hanmi. 1.2 Payment Terms. Unless otherwise indicated in writing by Hanmi, all Price(s) are exclusive of any applicable taxes, levies, import duties and fees of whatever nature imposed by or under the authority of any government or public authority, ail of which will be paid by Spectrum (other than taxes on Hanmi’s net income), Undisputed invoices that remain unpaid beyond the scheduled payment due date will be subject to an interest charge equal to a one percent (1.0%) per month, calculated from the scheduled payment due date forward; provided, that in no event will such annual rate exceed the maximum interest rate permitted by applicable law in regard io such payments. Such payments when made will be accompanied by all interest so accrued. 8 5. Representations and Warranties. 1.1 Mutual Representations and Warranties. Each Party hereby represents and warrants to the other Party as follows: 1.1.1 Such Party is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized. 1.1.2 Such Party (i) has the requisite power and authority and the legal right to enter into this Agreement and to perform its obligations hereunder, and (ii) has taken all necessary action on its part to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder. 1.1.3 This Agreement has been duly executed and delivered on behalf of such Party, and constitutes a legal, valid, binding obligation, enforceable against such Party in accordance with its terms. 1.1.4 All necessary consents, approvals and authorizations of all governmental authorities and other Persons required to be obtained by such Party in connection with this Agreement have been obtained. 1.1.5 The execution and delivery of this Agreement and the performance of such Party’s obligations hereunder (i) do not conflict with or violate any requirement of Applicable Laws or regulations and (ii) do not conflict with, or constitute a default under, any contractual obligation of such Party. 1.1.6 Each Party hereby certifies it does not and will not employ, contract with, or retain any person directly or indirectly to perform any of its obligations relating to this Agreement if such person is debarred under 21 U.S.C. 335a (a) or (b) or other equivalent laws, rules, regulations, or standards of any other jurisdiction. Upon written request of a Party, the other Party will, within ten (10) business days, provide written confirmation that it has complied with the foregoing obligation. Each Party agrees to promptly disclose in writing to the other Party if any employee or agent is debarred, or if any action or investigation is pending or, to the best of its knowledge, threatened, relating to the debarment of it or any person performing services related to this Agreement 1.2 Representations and Warranties of Hanmi. 1.1.1 Hanmi represents, warrants and covenants that (a) the Production will be performed in accordance with Section 2.3: and (b) the Products when made available at Hanmi’s shipping docks will (i) meet Product Specifications; (ii) be free from defects in material and workmanship, (iii) have been Produced, stored and transported in accordance with CGMPs and Applicable Laws, (iv) not be adulterated or misbranded, (v) be free of all liens, security interests, and other claims of any nature created by Hanmi, with good title passing to Spectrum upon delivery at Spectrum’s facility, and that the labels, if applicable, obtained by Hanmi will conform to the label copy provided and approved by Spectrum. 1.1.2 DISCLAIMER. HANMI’S EXPRESS REPRESENTATIONS AND WARRANTIES STATED IN THIS AGREEMENT ARE IN LIEU OF, AND HANMI HEREBY DISCLAIMS, ALL OTHER REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT, WHETHER ORAL OR WRITTEN, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AND INCLUDING, WITHOUT LIMITATION, ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OR NON-MISAPPROPRIATION OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS (HOWEVER TOR THE AVOIDANCE OF DOUBT, THIS SECTION 5.2.2 DOES NOT NEGATE SECTION 7.2 OF THE LICENSE AGREEMENT). 6. Indemnification; Limitation of Liability; Waiver of Subrogation. 9 1.1 Spectrum Indemnified by Hanmi. Hanmi shall indemnify and hold Spectrum harmless from and against any liabilities or obligations, damages, losses, claims, encumbrances, costs or expenses, (including reasonable attorneys’ fees) (any or all of the foregoing herein referred to as a “Loss”) insofar as a Loss or actions in respect thereof, whether existing or occurring prior to, on or subsequent to the Effective Dale, arises out of or is based upon (a) any misrepresentation or breach by Hanmi of any of its representations, warranties, covenants or obligations under this Agreement; or (b) any claims that the Products, or the use thereof by Spectrum under this Agreement infringes a patent, trademark or proprietary right of a third party; or (c) the gross negligence, willful misconduct or violation of Applicable Laws by Miami, its Affiliates, licensors, contractors, distributors or their respective officers, directors, employees, consultants or authorized agents. 1.2 Hanmi Indemnified by Spectrum. Spectrum shall indemnify and hold harmless Hanmi from and against any Loss insofar as such Loss or actions in respect thereof occurs subsequent to the Effective Date, whether existing or occurring prior to. on or subsequent to the date hereof, arises out of or is based upon (a) any misrepresentation or breach of any of the warranties, covenants or agreements made by Spectrum in this Agreement or (b) the gross negligence, willful misconduct or violation of applicable laws by Spectrum, its Affiliates, licensors, contractors, distributors or their respective officers, directors, employees, consultants or authorized agents. 1.3 Indemnification Procedure. If a Party entitled to indemnification under this article (an “Indemnified Party”) makes an indemnification request to the other, the Indemnified Party shall permit the other Party (the “Indemnifying Party”) to control the defense, disposition or settlement of the matter at its own expense: provided, that the Indemnifying Party shall not, without the consent of the indemnified Party, enter into any settlement or agree to any disposition that imposes any conditions or obligations on the Indemnified Party. The Indemnified Party shall notify the Indemnifying Party promptly of any claim for which the Indemnifying Party is responsible and shall reasonably cooperate with the Indemnifying Party to facilitate defense of any such claim. An Indemnified Party shall at all times have the option to participate in any matter or litigation, including but not limited to participation through counsel of its mtn selection, if desired, the hiring of such separate counsel being at Indemnified Party’s own expense. 1.4 Complete Indemnification. As the Parties intend complete indemnification, all costs and expenses incurred by an Indemnified Party in connection with enforcement of Sections 6.1 and 6.2 will also be reimbursed by the Indemnifying Party. 1.5 Limitations of Liability. EXCEPT FOR EACH PARTY’S LIABILITY ARISING FROM INDEMNIFICATION OBLIGATIONS SET FORTH IN ARTICLE 6, BREACH OF CONFIDENTIALITY OBLIGATIONS SET FORTH IN ARTICLE 7 AND GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF EITHER PARTY, ITS AFFILIATES, LICENSORS, CONTRACTORS DISTRIBUTORS OR THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, CONSULTANTS OR AUTHORIZED AGENTS, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, NEITHER PARTY SHALL HAVE ANY LIABILITY ARISING OUT OF, OR OTHERWISE RELATING TO, THIS AGREEMENT, FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL, COLLATERAL, PUNITIVE, EXEMPLARY, OR INDIRECT DAMAGES SUFFERED BY THE OTHER PARTY OR ANY THIRD PARTY INCLUDING, WITHOUT LIMITATION, LOSS OF GOODWILL, LOSS OF PROFITS OR REVENUES, LOSS OF SAVINGS, LOSS OF USE, INTERRUPTION OF BUSINESS, INJURY OR DEATH TO PERSONS OR DAMAGE TO PROPERTY, WHETHER BASED ON BREACH OF CONTRACT, TORT OR ARISING IN EQUITY, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 1.6 Limitations an Essential Element of the Agreement. The Parties are willing to enter into this Agreement only in consideration of and in reliance upon the provisions of this Agreement limiting their exposure to loss or liability and committing to production of certain levels of product. Such provisions are an essential part of the bargain underlying this Agreement and have been reflected in the pricing and other consideration specified in this Agreement. Both Parties understand and agree that the exclusion of warranties, limitation of liability and the limitation of remedies allocate risks between the Parties as authorized under Applicable Laws. 10 7. Confidentiality. The Parties agree that the provisions of Section 6 of the License Agreement are incorporated herein and shall apply mutatis mutandis to this Agreement. 8. Term and Termination. 1.1 Term. This Agreement will be effective on the Effective Date and will continue in effect, on a country-by-country basis, until the expiration or termination of the License Agreement, for any reason, unless earlier terminated in accordance with the terms of this Agreement (the “Term”). 1.2 Termination for Breach. 1.1.1 Generally. In addition to any other termination right set forth in this Agreement, and except as provided in Section 8.3.2. the failure by either Party (the “Defaulting Party”) to comply with any of the Defaulting Party’s material obligations under this Agreement will entitle the other Party (the “Non-Defaulting Party”) to give to the Defaulting Party notice specifying the nature of the default and requiring the Defaulting Party to cure such default. If such default is not cured within thirty (30) days after the receipt of such notice (or, if such default reasonably cannot be cured within such thirty (30) day period or if the Defaulting Party will not commence and diligently continue actions to cure such default during such thirty (30) day period), the Non-Defaulting Party will be entitled, without prejudice to any of the other rights conferred on it by this Agreement or available to it at law, in equity or under this Agreement, to terminate this Agreement by giving further notice to the Defaulting Party, to take effect immediately upon delivery thereof. The right, of either Party to terminate this Agreement, as provided in this Section, will not be affected in any way by its waiver or failure to take action with respect to any previous default. 1.1.2 Exhaustion. No default based on a claimed failure of any Product to conform to the Product Specifications will be the subject of a notice under Section 8.2.1 until and unless all procedures and remedies specified in Article 3 will have first been exhausted, furthermore, Hanmi’s inability to supply Spectrum the Product due to Force Majeure will not be the subject of a notice under Section 8.2.1. In addition, notwithstanding Section 8.2.1. Hanmi will have [***] to cure a Supply Deficiency in accordance with Section 2.5.1. 1.3 Termination for Insolvency. Subject to any limitations imposed by applicable law, either Party will have the right to terminate this Agreement by giving notice to the other Party in the event that: 1.1.1 Such other Party will have: (i) voluntarily commenced any proceeding or filed any petition seeking relief under the bankruptcy, insolvency or other similar laws of any jurisdiction and the same is not withdrawn within [***] thereafter, (ii) applied for, or consented to, the appointment of a receiver, trustee, custodian, sequestrator, conciliator, administrator or similar official for it or for all or substantially all of its property, (iii) filed an answer admitting the material allegations of a petition filed against or in respect of it in any such proceeding, (iv) made a general assignment for the benefit of creditors of all or substantially all of its assets, (v) become unable generally, or admitted in writing its inability, to pay all or substantially all of its debts as they, become due, or(vi) taken corporate action for the purpose of effecting any of the foregoing; or 1.1.2 An involuntary proceeding will have been commenced, or any involuntary petition will have been filed, in a court of competent jurisdiction seeking: (i) relief in respect of such other Party, or of its properly, under the bankruptcy, insolvency or similar laws of any jurisdiction, (ii) the appointment of a receiver, trustee, custodian, sequestrator, conciliator, administrator or similar official for such other Party or for all or substantially all of its properly, or (iii) the winding-up or liquidation of such other Party; and, in each case, such proceeding or petition will have continued undismissed for [***] days or an order or decree approving or ordering any of the foregoing will have continued unstayed, unappealed and in effect for [***]. 1.4 Consequences of Termination. Any termination of the Agreement will not release the Parties from any liabilities and obligations accrued under this Agreement or under any Purchase Order that has been issued and deemed accepted under this Agreement as of the date thereof, in 11 the event of any termination of this Agreement, Hanmi will Produce any Product for which Purchase Order was accepted prior to termination, and Spectrum shall purchase such Product in accordance with the terms and conditions of this Agreement. Spectrum will honor its purchase of such Product from Hanmi in accordance with the terms of this Agreement. 1.5 Accrued Rights; Surviving Obligations. 1.1.1 Accrued Rights. Termination, relinquishment, or expiration of this Agreement for any reason will be without prejudice to any rights that will have accrued to the benefit of either Party prior to such termination, relinquishment, or expiration. Such termination, relinquishment or expiration will not relieve either Party from obligations that are expressly indicated to survive termination or expiration of this Agreement. 1.1.2 Surviving Obligations. All of the Parties’ respective rights and obligations under Articles 8 through 12 will survive termination, relinquishment or expiration of this Agreement. 9. Regulatory. 1.1 Permits. Hanmi will be responsible, al Hanmi’s expense, to obtain and maintain all permits and licenses required for it to carry out its development. Production, testing, storage, and delivery obligations hereunder. 1.2 Compliance with CGMPs; Monitoring of Records. Hanmi will monitor and maintain reasonable records respecting its compliance with CGMPs in the manner provided by the Quality Agreement, including the process of establishment and implementation of the operating procedures and the training of personnel as are reasonably necessary to assure such compliance. Hanmi will maintain and keep the Products current with CGMPs and industry practice, including stability program, statistical process controls, etc. 1.3 Regulatory Authority Inspections. Hanmi will permit Regulatory Authorities to inspect and audit its Production facilities and cooperate with Regulatory Authorities in connection with such audit (including, without limitation, any pre-approval inspections), and will provide information and data in a timely manner. Each Party will notify the other within [***] of all contacts with Regulatory Authorities (both written and verbal) related to each Product. Each Party will inform the other of the result of any regulatory inspection, which directly affects the Commercial Launch, commercialization, or Production of the Product, including any notice of inspection, notice of violation or other similar notice received by a Party affecting Production, Facility, testing, storage, or handling, Commercial Launch or commercialization of the Product. In the event of an inspection by a Regulatory Authority, which directly involves the Product, each Party will be immediately informed of the issuance of the Notice of Inspection (FDA Form 482 or equivalent) and will have the right to be present during any such inspection. In the event that there are inspectional observations (FDA Form 483 or equivalent), each Party will be informed immediately and will have the opportunity to review and provide the other with comments to the other’s response. Each Party will provide its comments to the response of these observations within [***]. The contents of a Party’s response will be determined by such Party in its sole discretion, but such Party will take into consideration any comments provided by the other Party. 1.4 Regulatory Communications and Correspondence. Except as provided in this Agreement, any and all other communications from and to the FDA or other Regulatory Authorities related to the Production of the Product at the Facility will be handled in accordance with the terms and conditions of the Quality Agreement, or as otherwise agreed in writing by Hanmi and Spectrum. 1.5 Regulatory Filings and Maintenance. Hanmi will prepare and maintain all regulatory filings and manufacturing files, certificates, authorizations, data, and other records that directly pertain to the Production of the Product, as further set forth in the Quality Agreement or as otherwise agreed in writing by Hanmi and Spectrum. 12 1.6 Records. Hanmi will maintain the records required by the terms and conditions of the Quality Agreement, or as otherwise agreed to in writing by Hanmi and Spectrum. Hanmi agrees that, in response to any complaint, or in the defense by Spectrum of any litigation, hearing, regulatory proceeding or investigation relating to the manufacture of Product. Hanmi will use reasonable efforts to make available to Spectrum during normal business hours and upon reasonable prior written notice, such Hanmi employees and records reasonably necessary to permit the effective response to, defense of, or investigation of such matters, subject to appropriate confidentiality protections. Spectrum will reimburse Hanmi for all costs and expenses incurred by Hanmi in connection with the performance of Hanmi’s obligations under the immediately preceding sentence. 1.7 Notification. Each Party promptly will notify the other of new regulatory requirements of which it becomes aware which are relevant to the Production of the Product under this Agreement and which are required by the FDA. any other applicable Regulatory Authority or other Applicable Laws or governmental regulations, and will confer with each other with respect to the best means to comply with such requirements. 10. Miscellaneous. 1.1 Assignment. Neither Party may assign this Agreement without the prior written consent of the other Party, which consent will not be unreasonably withheld. Notwithstanding the foregoing, Spectrum may, without the prior consent of Hanmi, assign this Agreement to its Affiliate(s) or to the successor entity in connection with a merger or acquisition, or to an entity acquiring substantially all of the product line or business operations of Spectrum, provided that such successor or acquiring entity will expressly assume in writing the obligation to perform in accordance with the terms and conditions of this Agreement. Any purported assignment not in compliance with this Section will be void and of no force or effect. 1.2 Severability. If any item or provision of this Agreement will to any extent be invalid or unenforceable, it will be severed from this Agreement, and the remainder of this Agreement will not be affected thereby, and each term and provision of this Agreement will be valid and will be enforced to the fullest extent permitted by Applicable Law. 1.3 Notices. Any consent, notice or report required or permitted to be given or made under this Agreement by one of the Parties hereto to the other will be in writing, delivered personally or by e-mail, facsimile, or express courier, postage prepaid (where applicable), addressed to such other Party at its address indicated below, or to such other address as the addressee will have last furnished in writing to the address or in accordance with this Section and (except as otherwise provided in this Agreement) will be effective upon receipt by the addressee (but, if received, in the recipient’s time zone, after 5:00 p.m. on a business day, or anytime on a day that is not a business day, then receipt will be deemed to be at 9:00 a.m. on the next business day). If to Hanmi: Hanmi Pharmaceuticals Co.. Ltd. 45 Bangi-dong. Songpa-gu Seoul, 138-724, Korea Attn: Global Business Team Telephone: (2) 410-8779 Facsmile: (2) 410-9079 If to Spectrum: Spectrum Pharmaceuticals. Inc. 11500 South Eastern Ave. Suite 240 Henderson, NV 89052 Attn: Legal Department Telephone number: (702) 835-6300 13 Facsimile number: (702) 260-7405 E-Mail: legal@sppirx.com 1.4 Disputes; Governing Law and Jurisdiction. 1.1.1 In the event of any controversy or claim arising from or relating to any provision of this Agreement, or any term or condition hereof, or the performance by a Party of its obligations hereunder, or its construction or its actual or alleged breach, the Parties will try to settle their differences amicably between themselves in negotiations between designated executives of Hanmi and Spectrum. Either Party may provide written notice of a dispute to the other Party, and the designated officers of each Party will thereafter promptly meet to attempt to resolve that dispute. 1.1.2 Any dispute which is not resolved as provided in subsection (a) above, will be settled by final and binding arbitration before a single arbitrator in Hawaii. The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures. The award rendered thereon by the arbitrator shall be final and binding on the parties thereto, and judgment thereon may be entered in any court of competent jurisdiction. The prevailing party shall be entitled to recover from the losing party reasonable attorney’s fees, expenses, and costs. In no event will the arbitrator have any right or power to award punitive or exemplary damages. 1.1.3 This Agreement shall be construed and enforced in accordance with the laws of the State of New York, USA, without reference to its choice of law principles. Furthermore, the Parties expressly waive the application of the United Nations Conventions on Contracts for the International Sale of Goods to this Agreement. 1.5 Entire Agreement. This Agreement constitutes the entire and exclusive agreement between the Parties with respect to the subject matter hereof and supersedes and cancels any inconsistent terms in any previous discussions, agreements, representations, commitments and writing in respect thereof including, without limitation, any inconsistent terms in the License Agreement. No amendment or addition to this Agreement will be effective unless reduced to writing and executed by the authorized representatives of the Parties. In the event of a conflict between the provisions of this Agreement and the provisions of any exhibits or attachments hereto, the provisions of this Agreement will govern. 1.6 Attempts to Amicably Resolve Disputes. 1.1.1 To avoid litigation and to resolve any conflicts that arise under this Agreement, Hanmi and Spectrum agree that, prior to the commencement of arbitration by either Party, the Parties will engage in executive mediation. Either Party may seek executive mediation by delivering a written request for such mediation to the other. Delivery of such request may be made by hand, by facsimile transmission or by electronic mail. The request will be addressed to the following individuals: Hanmi: Dr. Se Chang Kwon, President and CEO Spectrum: Thomas J. Riga, Chief Operating Officer 1.1.2 Within five [***] days of the delivery of such request, each Party will appoint a company executive to meet with the other Party’s company executive for the purpose of resolving the dispute. No later than [***] days of their appointment, the two executives will meet to consider the dispute. They may request such information as either deems necessary and may meet jointly or separately with party representatives involved in the dispute. The two appointed executives will use good faith efforts to reach a resolution of the dispute. 1.1.3 If a resolution is reached, it will be reduced to writing and will be final and binding on the Parties. 14 1.1.4 If the two executives cannot reach agreement within [***] days of their initial meeting, unless the two executives agree to additional review time, either Party may thereafter pursue any remedy al law or in equity. 1.7 Specific Performance. The rights of the parties under this Agreement are unique and. accordingly, the parties shall, in addition to such other remedies as may be available to any of them at law or in equity, have the right to seek to enforce their rights under this Agreement by actions for specific performance to the extent permitted by law and without any requirement to post bond. 1.8 Waiver. No waiver of any rights will be effective unless consented to in writing by the Party to be charged and the waiver of any breach or default will not constitute a waiver of any other right hereunder or any subsequent breach or default. 1.9 Independent Contractors. Hanmi and Spectrum each acknowledge that they will be independent contractors and that the relationship between the two Parties will not constitute a partnership, joint venture, agency, or any type of fiduciary relationship. Neither Hanmi nor Spectrum will have the authority to make any statements, representations or commitments of any kind, or to take any action, which will be binding on the other Party, without the prior consent of the other Party to do so. 1.10 Affiliate(s). Any licenses granted under this Agreement by Spectrum will be deemed to be granted both to Hanmi and Hanmi’s Affiliate(s) Hanmi will cause its Affiliate(s) to comply fully with the provisions of this Agreement to the extent such provisions specifically relate to, or are intended to specifically relate to, its Affiliate(s), as though its Affiliate(s) were expressly named as joint obligors hereunder. 1.11 Counterparts/Facsimile. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. Facsimile signatures (including those on PDF) will have the same force and effect as original signatures. 1.12 Subcontracting. Hanmi may subcontract certain obligations hereunder if the same is approved in writing in advance by Spectrum and provided each such subcontractor agrees to be bound by obligations not less onerous than those set forth herein. Notwithstanding the preceding sentence, Hanmi will remain wholly responsible for executing and monitoring the work performed by such subcontractors pursuant to the terms of this Agreement. 1.13 Force Majeure. Neither Party will be liable for failure of or delay in performing obligations set forth in this Agreement, and neither will be deemed in breach of its obligations, if such failure or delay is due to Force Majeure. In event of Force Majeure, the Party affected thereby will use reasonable efforts to cure or overcome the same and resume performance of its obligations hereunder. If an event of Force Majeure continues and causes a Party to delay its performance of its obligations for more than [***], then the other Party will have the right upon written notice to terminate this Agreement without any liability to the other Party. 1.14 Quality Agreement. The safety, quality control, and quality assurance aspects relating to the Products will be pursuant to the Quality Agreement. In the event of a conflict between the provisions of this Agreement and the provisions of the Quality Agreement, the provisions of the Quality Agreement will govern. 1.15 License Agreement. In the event of a conflict between the provisions of this Agreement and the provisions of the License Agreement, the provisions of this Agreement will govern. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 15 IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their duly authorized representatives as of the Effective Date, Hanmi Pharmaceuticals Co., Ltd). Spectrum Pharmaceuticals, Inc. By /s/ Se Chang Kwon By: /s/ Joseph W. Turgeon Name: SE CHANG KWON Name: Joseph W. Turgeon Title: PRESIDENT & CEO Title: President, CEO Date: 28 Feb 2018 Date: 2-28-2018 16 [***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded information is not material and the registrant customarily and actually treats as private and confidential. FIRST AMENDMENT TO SUPPLY AGREEMENT THIS FIRST AMENDMENT to the Supply Agreement dated February 28, 2018 (this “First Amendment”) is effective as of December 6, 2019 (the “First Amendment Effective Date”), and is by and between Spectrum Pharmaceuticals, Inc. (“Spectrum”) and Hanmi Pharmaceutical Co., Ltd. (“Hanmi”). Spectrum and Hanmi may each be referred to individually herein as a “Party,” and collectively as the “Parties.” WHEREAS, Spectrum and Hanmi entered into that certain Supply Agreement effective February 28, 2018 (the “Agreement”); and WHEREAS, the Parties desire to revise certain terms and conditions relating to Spectrum’s purchases of Product during the Term. NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows: 1. All capitalized terms used but not otherwise defined herein shall have the same meaning as set forth in the Agreement. 2. Amendment of Section 1. Section 1 of the Agreement (titled “Definitions”) is hereby amended by (i) deleting therefrom the definitions of “Post-Filing Purchase Order” and “Stockpiled Amount,” and (ii) adding thereto the following definitions: “First Option” has the meaning stated in Section 2.1.6.1. “First Option Purchase Order” has the meaning stated in Section 2.1.6.1. “Post-BLA Acceptance Purchase Order” has the meaning stated in Section 2.1.2. “Second Option” has the meaning stated in Section 2.1.6.2. “Second Option Purchase Order” has the meaning stated in Section 2.1.6.2. “Second Post-Approval Purchase Order” has the meaning stated in Section 2.1.5. 3. Amendment of Section 2.1.2. Section 2.1.2 of the Agreement (titled “Post-Filing Purchase Order”) is hereby deleted from the Agreement in its entirety and is replaced by the amended Section 2.1.2 (titled “Post-BLA Acceptance Purchase Order”) set forth below. For the avoidance of doubt, the Parties acknowledge and agree that, upon the Parties’ execution of this First Amendment, the purchase obligation described in the initial (as originally executed) version Page 1 of #NUM_PAGES# of Section 2.1.2 — i.e., Spectrum’s obligation to issue a purchase order for [***] of Product to Hanmi no more than [***] following the filing of the Eflapegrastim BLA - shall be deemed void ab initio, and shall be superseded by the amended Section 2.1.2 set forth below: “2.1.2 Post-BLA Acceptance Purchase Order. No more than [***] after Spectrum receives a “Filing Letter” (as defined in FDA SOPP 8401: Administrative Processing of Original Biologies License Applications (BLA) and New Drug Applications (NDA)) from FDA reflecting FDA’s acceptance of the Eflapegrastim BLA (“the BLA”) filing, Spectrum shall issue an irrevocable binding Purchase Order to Hanmi for no less than [***] of the Product (the “Post-BLA Acceptance Purchase Order”), and Hanmi shall Produce and deliver the ordered amount of Saleable Product to Spectrum not later than [***] after the date of issuance of such Post-BLA Acceptance Purchase Order at a purchase price of $[***].” 4. Amendment of Section 2.1.3. Section 2.1.3 of the Agreement (titled “Post-Approval Purchase Order”) is hereby deleted from the Agreement in its entirety and is replaced by the following amended Section 2.1.3: “2.1.3 Post-Approval Purchase Order. No more than [***] after the later of (i) FDA’s approval (licensure) of the BLA, and (ii) Spectrum’s acceptance of the [***] of Saleable Product delivered under the Post-BLA Acceptance Purchase Order, Spectrum shall issue an irrevocable binding Purchase Order to Hanmi for no less than [***] of the Product (the “Post- Approval Purchase Order,” and, together with the Pre-Filing Purchase Order, the Post-BLA Acceptance Purchase Order, and the Second Post-Approval Purchase Order, the “Pre-Agreed Purchase Orders”), and Hanmi shall Produce and deliver the ordered amount of Saleable Product not later than [***] after the date of issuance of such Post-Approval Purchase Order at a purchase price of $[***].” 5. Amendment of Section 2.1.4. The first sentence of Section 2.1.4 of the Agreement (titled “Additional Purchase Orders”) is hereby amended by deleting therefrom the words “during the calendar years 2018 through 2020” and replacing them with the words “doting the calendar years 2020 through 2022.” 6. Amendment of Section 2.1.5. Section 2.1.5 of the Agreement (titled “Spectrum Option”) is hereby deleted from the Agreement in its entirety and is replaced by the following amended Section 2.1.5 (titled “Second Post-Approval Purchase Order”): “2.1.5 Second Post-Approval Purchase Order. No more than [***] after accepting Hanmi’s delivery of the Saleable Product ordered under the Post-Approval Purchase Order, but no earlier than [***] after the date of such Post- Approval Purchase Order, Spectrum shall issue an irrevocable binding Purchase Order to Hanmi for no less than [***] of the Product (the “Second Post-Approval Purchase Order”), and Hanmi shall Produce and deliver the ordered amount of Saleable Product not later than [***] after the date of issuance of such Second Post-Approval Purchase Order at a purchase price of $[***].” 7. Amendment of Section 2.1.6. Section 2.1.6 of the Agreement (titled “Post-Approval Stockpile ‘Put’ Option”) is hereby deleted from the Agreement in its entirety and is replaced by the following amended Section 2.1.6 (titled “Spectrum Options”), including Subsections 2.1.6.1 and 2.1.6.2: “2.1.6 Spectrum Options. In addition to the purchases described in Sections 2.1.1 through 2.1.5 above, Spectrum shall have the following unilateral purchase options: 2.1.6.1 The First Option ([***]). Spectrum shall have a unilateral option to order [***] of Product from Hanmi (the “First Option”), and it may exercise such First Option by issuing an irrevocable binding Purchase Order to Hanmi (the “First Option Purchase Order”) not later than [***] after accepting Hanmi’s delivery of the Saleable Product ordered under the Second Post- Page 2 of #NUM_PAGES# Approval Purchase Order. If Spectrum in its discretion exercises the First Option, Hanmi shall Produce and deliver the ordered amount of Saleable Product not later than [***] after the date of issuance of such First Option Purchase Order at a purchase price of $[***]. 2.1.6.2 The Second Option ([***]). If Spectrum exercises the First Option, the Spectrum shall also have a unilateral option to order an [***] of Product from Hanmi (the “Second Option”), and it may exercise such Second Option by issuing an irrevocable binding Purchase Order to Hanmi (the “Second Option Purchase Order”) not later than [***] after accepting Hanmi’s delivery of the Saleable Product ordered under the First Option Purchase Order. If Spectrum in its discretion exercises the Second Option, Hanmi shall Produce and deliver the ordered amount of Saleable Product not later than [***] after the date of issuance of such Second Option Purchase Order at a purchase price of $[***].” 8. Amendment of Section 2.1.7. The first sentence of Section 2.1.7 of the Agreement (titled “True Up”) is hereby amended by deleting therefrom the parenthetical phrase “(including the Stockpiled Amount).” 9. Amendment of Section 2.1.8. The Section 2.1.8 of the Agreement (titled “Subsequent Purchase Orders”) is hereby amended as follows: a. The first sentence of Section 2.1.8 is amended by deleting the words “third anniversary” therefrom and replacing them with the words “fourth anniversary.” b. The last sentence of Section 2.1.8 is amended by deleting the words “and Stockpiled Amount” therefrom. 10. Except as expressly provided in this First Amendment, all terms, conditions, and provisions of the Agreement shall apply and remain in full force and effect. Page 3 of #NUM_PAGES# 11. To the extent that any of the terms and conditions in the Agreement shall contradict or be in conflict with the terms and conditions of this First Amendment, such terms and conditions are hereby deemed modified or amended by the terms and conditions of this First Amendment. IN WITNESS WHEREOF, the Parties have, by their duly authorized representatives, executed this First Amendment, effective as of the First Amendment Effective Date. SPECTRUM PHARMACEUTICALS, INC. HANMI PHARMACEUTICAL CO., LTD. Signature: /s/ Thomas J Riga Signature: /s/ Se Chang Kwon Name: Thomas J Riga Name: Se Chang Kwon Title: Chief Operating Officer Title: President and CEO Date: Decembers 6, 2019 Date: December 6, 2019 Page 4 of #NUM_PAGES# [***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded information is not material and the registrant customarily and actually treats as private and confidential. SECOND AMENDMENT TO SUPPLY AGREEMENT -ROLONTIS This SECOND AMENDMENT TO SUPPLY AGREEMENT - ROLONTIS (this “Second Amendment”) is made and effective as of January 1st, 2022 (the “Second Amendment Effective Date”) by and between Spectrum Pharmaceuticals Inc., a Delaware corporation (“Spectrum”) and Hanmi Pharmaceuticals Co., Ltd., a company incorporated under the laws of the Republic of Korea (“Hanmi”). In this Second Amendment, Hanmi and Spectrum each may be referred to individually as a “Party” and together as the “Parties.” WHEREAS, Spectrum and Hanmi are parties to that certain Supply Agreement, dated February 28, 2018, as amended by that certain First Amendment dated December 6, 2019 (the “Supply Agreement”); and WHEREAS, the Parties wish to revise the terms of the Supply Agreement with respect to purchase orders, minimum purchase requirements, and pricing, as set forth below: NOW THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows: 1. Unless otherwise indicated, capitalized terms used but not defined herein shall have the meanings set forth in the Supply Agreement. 2. Sections 2.1.1 through 2.1.8 of the Supply Agreement. Sections 2.1.1 through 2.1.8 of the Supply Agreement are hereby amended by deleting such sections in their entirety and substituting the following in lieu thereof: 2.1.1 Existing Purchase Orders. The Parties agree that all Purchase Orders issued by Spectrum on or prior to the Second Amendment Effective Date are hereby cancelled, and Spectrum shall have no obligation to purchase any Product or pay any amounts to Hanmi pursuant to any such Purchase Orders. To the extent Hanmi has any existing Product in inventory manufactured pursuant to any such Purchase Orders, Hanmi will ship any or all such inventory to Spectrum at any time at Spectrum’s request, provided that Hanmi’s obligation to store such existing Product shall terminate on the expiration date of the existing Product. 2.1.2 Additional Purchase Orders. On and after the Second Amendment Effective Date, Hanmi shall Produce and Deliver Product to Spectrum only upon Spectrum’s request pursuant to Purchase Orders submitted by Spectrum on or after the Second Amendment Effective Date, with a Delivery Date no sooner than [***] from the date of such Purchase Order (each such Purchase Order, an “Additional Purchase Orders”). Each Additional Purchase Order shall be subject to acceptance by Hanmi. If Hanmi accepts an Additional Purchase Order, Hanmi shall deliver the Saleable Products in accordance with the terms of such Additional Purchase Order and this Agreement. Spectrum will have no minimum purchase obligations with respect to the Product, provided that each Additional Purchase Order shall be ordered on the basis of batch sizes of the Product. CONFIDENTIAL 1 2.1.3 Purchase Price. The purchase price of Product shipped by Hanmi in the first one- year period following the Commercial Launch (the “Year 1” in table below) shall be US$[***]. The purchase price of the Product shipped in the second one-year period following the Commercial Launch (the “Year 2” in the table below) shall be US$[***]. The purchase price of Product shipped in the third one-year period following the Commercial Launch (the “Year 3” in the table below) shall be US$[***]. After the third one-year period following the Commercial Launch, the purchase price shall be set quarterly by the Parties based on market conditions, such as an agreed-upon percentage of the average selling price of the Product, provided that both Parties will use reasonable efforts to reduce COG (including, but not limited to, Spectrum’s efforts to acquire all relevant regulatory approvals for the Product). For the avoidance of doubt, the purchase price of the Product shall be determined by the date Hanmi releases the Product from Hanmi’s production site. If the date of shipment is delayed due to any reason not attributable to Hanmi, the purchase price shall be determined by the projected release date of such batch (or batches) of the Product set forth in the production plan. For the avoidance of doubt, and by way of example for clarity in calculating the purchase price, assuming that the Commercial Launch date is July 1, 2022, the purchase price shall be calculated as follows: Years from Commercial Launch Purchase Price (per gram) Year 1 (July 1, 2022-June 30, 2023) US$[***] Year 2 (July 1, 2023 - June 30, 2024) US$[***] Year 3 (July 1, 2024 - June 30, 2025) US$[***] Year 4 and onward (July 1, 2025 - onward) [***] 3. Continuing Effect. Except as specifically amended by this Second Amendment, the Supply Agreement shall remain in full force and effect in accordance with its terms. Sections or other headings contained in this Second Amendment are for reference purposes only and shall not affect in any way the meaning or interpretation of this Second Amendment. 4. Counterparts. This Second Amendment may be executed in counterparts with the same force and effect as if each of the signatories had executed the same instrument. CONFIDENTIAL 2 [Signature Page Immediately Follows] CONFIDENTIAL 3 IN WITNESS WHEREOF, the Parties have executed this Second Amendment to Supply Agreement - Rolontis as of the Second Amendment Effective Date. SPECTRUM PHARMACEUTICALS, INC. HANMI PHARMACEUTICALS CO., LTD. By: /s/ Thomas Riga By: /s/ Se-Chang Kwon Name: Thomas Riga Name: Se-Chang Kwon Title: President and CEO Title: CEO CONFIDENTIAL 4 EXHIBIT 21.1 List of Subsidiaries SUBSIDIARY/AFFILIATE NAME INCORPORATION Spectrum Oncology Private Limited India Spectrum Pharmaceuticals International Holdings, LLC Delaware Allos Therapeutics, Inc. Delaware Spectrum Pharmaceuticals Cayman, L.P. (1% Spectrum Pharmaceuticals International Holdings, LLC and 99% Spectrum Pharmaceuticals, Inc.) Cayman Islands Spectrum Pharmaceuticals, B.V. Netherlands Spectrum Pharmaceuticals Canada, Inc. Canada Talon Therapeutics, Inc. Delaware EXHIBIT 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the incorporation by reference in the Registration Statements (Nos. 333-257876, 333-37585, 333-60966, 333-102587, 333- 105814, 333-108658, 333-110103, 333-115759, 333-121612, 333-125208, 333-135029, and 333-194823) on Form S-3 and the Registration Statements (Nos. 333-239349, 333-225704, 333-30321, 333-30345, 333-54246, 333-106427, 333-119833, 333-134566, 333-160312, 333- 160705, 333-164014, 333-176681, 333-202761 and 333-216692) on Form S-8 of Spectrum Pharmaceuticals, Inc. of our report dated March 31, 2023, relating to the consolidated financial statements of Spectrum Pharmaceuticals, Inc. appearing in this Annual Report on Form 10-K of Spectrum Pharmaceuticals, Inc. for the year ended December 31, 2022. /s/ RSM US LLP Los Angeles, California March 31, 2023 EXHIBIT 31.1 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER I, Thomas J. Riga, certify that: 1. I have reviewed this Annual Report on Form 10-K of Spectrum Pharmaceuticals, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. Date: March 31, 2023 /s/ THOMAS J. RIGA Thomas J. Riga President and Chief Executive Officer (Chief Executive Officer) EXHIBIT 31.2 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER I, Nora E. Brennan, certify that: 1. I have reviewed this Annual Report on Form 10-K of Spectrum Pharmaceuticals, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. Date: March 31, 2023 /s/ NORA E. BRENNAN Nora E. Brennan Executive Vice President and Chief Financial Officer (Principal Financial Officer) EXHIBIT 32.1 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Spectrum Pharmaceuticals, Inc. (the “Company”), hereby certifies, to such officer’s knowledge, that: (i) the accompanying Annual Report on Form 10-K of the Company for the year ended December 31, 2022 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: March 31, 2023 /s/ THOMAS J. RIGA Thomas J. Riga Chief Executive Officer and President This certification accompanies this Report pursuant to Rule 13a-14(b) or Rule 15d-14(b) under the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. EXHIBIT 32.2 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Spectrum Pharmaceuticals, Inc. (the “Company”), hereby certifies, to such officer’s knowledge, that: (i) the accompanying Annual Report on Form 10-K of the Company for the year ended December 31, 2022 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: March 31, 2023 /s/ NORA E. BRENNAN Nora E. Brennan Executive Vice President and Chief Financial Officer This certification accompanies this Report pursuant to Rule 13a-14(b) or Rule 15d-14(b) under the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.