EXHIBIT 10.1 SECURITIES PURCHASE AGREEMENT This Securities Purchase Agreement (this "Agreement") is made as of May 17, 2001, by and among Montrose Investments Ltd., a Cayman Islands corporation, Strong River Investments, Inc., a Cayman Islands...

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                                                                    EXHIBIT 10.1

                          SECURITIES PURCHASE AGREEMENT

     This Securities Purchase Agreement (this "Agreement") is made as of May 17,
2001, by and among Montrose Investments Ltd., a Cayman Islands corporation,
Strong River Investments, Inc., a Cayman Islands corporation (each such investor
individually, a "Purchaser," and collectively, the "Purchasers"), and
NeoTherapeutics, Inc., a Delaware corporation (the "Company"), whereby the
parties agree as follows:

     The Purchaser shall buy from the Company and the Company agrees to sell to
the Purchasers: (i) 1,400,000 shares (the "Shares") of the Company's common
stock, par value $.001 per share (the "Common Stock") at a price per share of
$4.25, and (ii) five-year warrants to purchase up to 280,000 shares of Common
Stock at a purchase price per share of $6.00, as follows:



                                Shares     Warrant Shares   Purchase Price
                                                   

Montrose Investments Ltd.       900,000        180,000        $3,825,000
Strong River Investments, Inc.  500,000        100,000        $2,125,000


     The Company is a corporation duly incorporated and validly existing under
the laws of the State of Delaware. The Company has the requisite corporate power
and authority to enter into and perform its obligations under this Agreement and
to issue and sell the Shares in accordance with the terms of this Agreement, and
the issuance of the Shares shall not contravene any agreement to which the
Company is a party. The Shares have been duly authorized by all necessary
corporate action, and, when paid for and issued in accordance with the terms of
this Agreement, the Shares will be validly issued, fully paid and nonassessable.
The Shares have been listed on the Nasdaq National Market.

     The Shares are being issued and sold pursuant to a registration statement
on Form S-3, File No. 333-53108, which registration statement has been declared
effective and continues to be effective and not subject to any stop order by the
Securities and Exchange Commission. The Company has delivered to each Purchaser
and each Purchaser has reviewed a copy of the prospectus included in such
registration statement and a prospectus supplement regarding the issuance and
sale of the Shares, a copy of which is attached hereto as Exhibit A.

     Prior to the close of business on May 18, 2001:

     1.   Each Purchaser shall wire their respective purchase price set forth
          above to the Company to the account set forth below:

          Chase Manhattan Bank, N.Y.C.
          0 Xxx Xxxx Xxxxx, 00xx Xxxxx
          Xxx Xxxx, XX  00000

          ABA Routing No:  021 000 021
          FBO: Xxxxxxx Xxxxx Xxxxxx, Inc.
               Account No.  066-198038
          For further credit to:  NeoTherapeutics, Inc.
               Account No. 561-04051-19-103



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     2.   The Company shall cause its transfer agent to transmit the Shares
          electronically to each Purchaser's account with the DTC set forth
          below:

          DTC No. 0050                 DTC No. 352
          Account No. 038-07785        Account No. 102-07978, Attn: Xxxxx Xxxxxx
          Montrose Investments Ltd.    Strong River Investments, Inc.

     Notices to the Company shall be delivered to:

     NeoTherapeutics, Inc.
     Attention: Xxxxxx Xxxxx, Senior Vice President, Finance
     000 Xxxxxxxxxx Xxxxx,
     Xxxxxx, Xxxxxxxxxx  00000
     Facsimile:  (000) 000-0000

     Notices to the Purchasers shall be delivered to:

     For Montrose Investments Ltd.:

     Montrose Investments Ltd.
     c/o  Xxxx Xxxxx and Xxx Xxxxxx
     000 Xxxxxxxx Xxxxx, Xxxxx 000
     Xxxxxx, XX 00000
     Facsimile:  (000) 000-0000

     For Strong River Investments, Inc.:

     Strong River Investments, Inc.
     c/x Xxxxxxx Capital Corp.
     000 Xxxxxxx Xxxxxx, 00xx Xxxxx
     Xxx Xxxx, Xxx Xxxx 00000
     Facsimile:  (000) 000-0000

     Delivery of an executed copy of a signature page to this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
copy of this Agreement and shall be effective and enforceable as the original.
This Agreement shall be governed and construed in accordance with the internal
laws of the State of New York without giving effect to the conflicts of law
principles thereunder.



                           [SIGNATURE PAGE TO FOLLOW]


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AGREED AND ACCEPTED, as of the date indicated above:

NeoTherapeutics, Inc.

By: /s/ Xxxxxx Xxxxx
    ---------------------------------
Name:  Xxxxxx Xxxxx
Title: Senior Vice President, Finance

Strong River Investments, Inc.

By: /s/ Xxxxxxx X. Xxxxxxxxx
    ---------------------------------
Name:  Xxxxxxx X. Xxxxxxxxx
Title: Attorney-in-Fact

Montrose Investments Ltd.

By: /s/ Xxxxx X. Xxxxx
    ---------------------------------
Name:  Xxxxx X. Xxxxx
Title: Authorized Signatory


                [SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]


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