Cell Therapeutics Gets In The Groove With Systems Medicine Acquisition

Johnson & Johnson’s Yondelis is in competition with Systems Medicine’s brostallicin to become first minor groove binding agent on the market.

Cell Therapeutics will gain worldwide rights to the novel Phase II oncologic brostallicin, which could potentially be used in multiple tumor types, as a result of its acquisition of Systems Medicine, CTI announced July 25.

The value of the stock-for-stock merger is $20 million, and by acquiring the DNA minor groove binding agent, a new class of anticancer drug, Seattle-based CTI gains a third late-stage oncologic. The firm currently is developing Xyotax (paclitaxel poliglumex) for lung and ovarian cancer and pixantrone for non-Hodgkin's lymphoma (¹ (Also see "Xyotax Retains Fast Track Status For Certain Female Lung Cancer Patients" - Pink Sheet, 11 Apr, 2007.)).

Under the terms of the deal, privately held Systems Medicine, based in Scottsdale, Ariz., will become a subsidiary of CTI and retain its current management structure.

"This is a very exciting, new family of compounds, the [DNA] minor binder agents, which would be synergistic, potentially, with the major groove binders, such as the anthracyclines (i.e. pixantrone)," CTI CEO James Bianco said during a same-day conference call. "Now it's a matter of finding the targeted indications to move [Brostallicin] forward toward market.

The acquisition comes six months after CTI's failed bid to acquire Miami-based DOR BioPharma (² (Also see "Cell Therapeutics CEO James Bianco: An Interview With “The Pink Sheet” DAILY" - Pink Sheet, 26 Jan, 2007.)).

During the call, the firms not only highlighted the potential of brostallicin, but also SMI's affiliation with the Translation Genomics Research Institute, which is focused on utilizing genomics to design clinical trials in patient populations perceived as having the highest likelihood of success.

"You want to pick the right patient for your drug and get to a point where you're treating tumors based on their personality, based on molecular homogeneity as opposed to the way we do it today, which is treating a tumor based on basically where it is in your body," SMI CEO Jeffrey E. Jacob explained. "The whole intent of informing clinical studies with mechanistic and genomic information is to get to faster, less expensive trials with better performing agents."

CTI Chief Medical Officer Jack Singer said that near-term plans include conducting Phase I studies designed by SMI examining brostallicin in combination with other oncologics, including Pfizer's Camptosar (irinotecan) and Genentech's Avastin (bevacizumab).

"Given the preclinicals that this drug can be put together with others and has enhanced activity and not terribly overlapping toxicities, we will be exploring that in Phase I," Singer said. "We see this as a potentially large drug. This would be like early studies on anthracyclines, when they first went into lymphomas and then were expanded from there."

Brostallicin has been examined in over 200 patients in Phase I and early Phase II clinical trials demonstrating anti-tumor activity in soft tissue sarcoma, head and neck cancer and non-small cell lung cancer.

"We would assume that this is going to have a fair spectrum of activity," he added. "But what we're trying to do is focus the early development on straight shots at approval, and not have to get to very large comparative trials."

By the end of the year, the firms are also eyeing the initiation of a Phase II/III brostallicin trial in liposarcoma, followed by a pivotal trial in 2008. An NDA filing is expected in 2009, with a launch proposed for the following year.

CTI, however, may not be the first on the market with a minor groove binder. That distinction could go to Johnson & Johnson/PharmaMar's Yondelis (trabectedin), which is currently in Phase III for soft tissue sarcoma and relapsed ovarian cancer, in combination with doxorubicin (J&J's Doxil). Yondelis is already awaiting action in the EU, and J&J earlier this year said it would file an NDA for relapsed ovarian cancer in 2008 (³ (Also see "Johnson & Johnson On Track For Eight NME Filings, Approvals In 2007" - Pink Sheet, 23 Jan, 2007.)).

Although Yondelis is farther along in development, Bianco told "The Pink Sheet" DAILY that brostallicin could have some advantages, like lower toxicity. In addition, the exec said trabectedin requires a 24-hour continuous infusion.

Separately, Bianco said CTI is in active discussions to purchase a currently marketed product for the treatment of relapsed indolent NHL with sales of $15-$18 million. That drug could eventually generate sales of more than $100 million through expansion into front-line applications.

"The product is complementary both in terms of treatment regimens as well as in target audience/customer base as our pixantrone product," Bianco said. "We believe this strategy will allow us to jump start a commercial effort focusing on novel and effective treatments for lymphoma as we bring pixantrone to an NDA next year and potential launch in early 2009."

- Jonathan M. Block ([email protected])