Shire Pays CTI BioPharma $10.3 Million to Terminate Cancer Deal it Picked Up From Baxalta
October 24, 2016
By Mark Terry, BioSpace.com Breaking News Staff
At the beginning of this year, Dublin-based Shire acquired Bannockburn, Ill.-based Baxalta . Only six months earlier, in July 2015, Baxalta spun off from Baxter International . In 2013, Baxter and CTI BioPharma signed an exclusive worldwide licensing deal to develop and market pacritinib in myelofibrosis, leukemia and certain solid tumors. Shire acquired that deal when it picked up Baxalta. Shire has now announced that it is paying to end the deal.
CTI received $60 million up front from Baxter, and the deal called for up to another $112 million in various milestone payments. Baxter turned it over to Baxalta in the spinout. When Shire bought Baxalta, it picked up a number of pipeline cancer drugs, and reportedly is interested in pursuing most of them. Pacritinib apparently is not one of them.
Pacritinib is a JAK2/FLT3 inhibitor that showed activity against genetic mutations associated to myelofibrosis, leukemia and some solid tumors. In March 2015, CTI announced that it had positive topline results on its trial of pacritinib, but was going to wait until a medical meeting to release data. And in February 2016, the FDA placed the drug on a full clinical hold after several patients died.
In a filing with the U.S. Securities and Exchange Commission (SEC), Baxalta indicated it is paying CTI $10.3 million for expenses either incurred by the pacritinib program or that are about to be spent—in other words, Baxalta and Shire are giving CTI BioPharma $10.3 million to go away.
John Carroll, writing for Endpoints News, says, “CTI—a biotech with a long and troubled history under CEO Jim Bianco—went on to post mixed data accumulated in the study, hitting one endpoint and missing another. But by that time the company’s share price had become mired in penny stock land. So, it was no great surprise to hear recently that Shire wanted out.”
On September 22, the NASDAQ Listing Qualifications team gave CTI BioPHarma 180 days—until March 20, 2017—to become compliant with the Mimimum Bid Price Rule. Essentially, they have six months to get the company’s stock around or above $1 per share for a minimum of 10 consecutive trading days.
CTI has traded around $0.40 per share since February 22. On February 10, it traded for $0.30. On January 29, it traded for $1.26. It is currently trading for $0.40.
CTI reported on September 13, 2016, that Shire had informed it of the end of the license agreement. “CTI and Shire currently intend to draft and negotiate a binding, definitive agreement,” CTI said in a filing. “There can be no assurances that the Company and Shire will be able to finally negotiate and execute a definitive agreement.”
Kelly Schlemm, a Shire spokesperson, told in-Pharma Technologist that it would allow Shire to be “better able to strategically focus resources on the right opportunities for the business and the patients we serve.”
In-Pharma asked Schlemm if the termination of the deal was related to the FDA’s clinical hold, and Schlemm said it “was made in light of the risk-benefit profile for patients that we observed.”