CTI Lands Baxter As Pacritinib Partner To Try To Reach Finish Line

The beleaguered oncology company has inked a partnership for its third late-stage candidate with hopes of taking it through approval, unlike its last two attempts.

With two recently failed late-stage cancer candidates, CTI BioPharma Corp. is hoping that the third time is the charm -- the troubled biotech inked a global commercialization agreement with Baxter International Inc. that it believes is a validation of the direction it’s taking.

CTI announced Nov. 15 that it has fulfilled its promise to investors to find a partner for its Phase III myleofibrosis drug pacritinib before the end of the year. Baxter will pay $60 million upfront for full commercialization rights outside the U.S., as well as joint commercialization rights in the U.S. The upfront payment will include a $30 million equity investment in the Seattle-based biotech company – an investment that CTI president and CEO Jim Bianco called “a long-term commitment,” in an interview.

CTI is also eligible for a slew of clinical and regulatory milestones up to $112 million, including $40 million in clinical milestones that are expected in 2014 and another $27 million possible in 2015 – enough to get the company through submission without it having to raise further equity, noted Bianco, who is pleased the company won’t have to dilute its shares.

Baxter will also be responsible for “a disproportionate amount of the development costs” for the drug, said Bianco. Baxter will handle 75% of costs through submission. Should more trials be needed post-approval, costs will vary based on territory. Costs will be split 50/50 if further study is required only by FDA; Baxter will be responsible for 100% of costs if they are only ex-U.S., and the split will shift back to 75/25 if costs are global.

Hopes Fall On Pacritinib

Bianco and CTI see pacritinib as a jumping off point for the company – this will be its first chance to build-out a commercial sales force in the U.S., a sales force that could be used to later sell other products in its pipeline. Bianco said the company expects to need about 90 sales reps, split between itself and Baxter, to market the drug in the U.S.

CTI believes that pacritinib, an oral tyrosine kinase inhibitor (TKI) that acts on the JAK2 and FLT3 pathways, will have no problem competing in the current marketplace against Incyte’s Jakafi (ruxolitinib), a JAK1/JAK2 inhibitor launched in late 2011 (Also see "Incyte’s Jakafi Gets Broad Label, Early Approval For Myelofibrosis" - Pink Sheet, 16 Nov, 2011.). While Jakafi was approved to treat intermediate- or high-risk myelofibrosis without a boxed warning or Risk Evaluation and Mitigation Strategy (REMS), doctors often reduce dosage of the drug because it frequently causes suppression of red blood cells and platelet formation in patients, said Bianco. Unlike Jakafi, pacritinib has shown improvement of symptoms without the suppression of platelets. CTI expects to position the drug as a treatment for patients’ with later stage disease; an area that CTI sees as a clear unmet medical need.

Pacritinib is currently in Phase III trials – CTI expects to complete the first trial in this program in the first half of 2014, with data in the second half of the year. Results from a second late-stage trial are expected by mid-year 2015. CTI hopes to submit pacritinib for approval in the U.S. and EU in the second half of 2015.

CTI acquired the JAK2 inhibitor in April 2012 from Asia’s S*BIO Pte. Ltd. for $30 million upfront and the promise of $132 million in regulatory and sales milestones [See Deal]. S*BIO is also eligible for single-digit royalties on the drug (Also see "CTI Sees Ideal Pipeline Acquisition In JAK2 Inhibitor Abandoned By Onyx" - Pink Sheet, 19 Apr, 2012.).

CTI is not the first company to partner with S*BIO on pacritinib. In 2009, Onyx Pharmaceuticals Inc. paid $25 million upfront to acquire an option to the compound, then known as SB1518, as well as another preclinical JAK2 inhibitor, SB1578 (Also see "Singapore S*BIO Inks "One Of The Biggest" Biotech Deals in Asia With Onyx For JAK2 Inhibitors" - Scrip, 7 Jan, 2009.). With the potential for up to $525 million in milestones, it was among the most lucrative biotech deals seen in Asia to that point. However, by spring 2011, Onyx determined that developing carfilzomib for multiple myeloma was its main priority and declined its option on both compounds, returning all rights to S*BIO (Also see "Onyx Walks Away From Option To Develop S*BIO JAK2 Inhibitors; S*BIO CEO Looks To Chart A New Course" - Scrip, 4 May, 2011.).

Pacritinib is the CTI’s latest hope – the biotech had two late-stage setbacks in the past couple of years. First FDA rejected its non-Hodgkin’s lymphoma treatment pixantrone and then the company pulled the drug’s NDA just weeks before its second attempt at an advisory committee meeting, facing another negative opinion (Also see "Saving Face? Cell Therapeutics Withdraws Pixantrone NDA Ahead Of Advisory Committee Review" - Pink Sheet, 30 Jan, 2012.). At the time, CTI blamed the need for more time to prepare for the Oncologic Drugs Advisory Committee meeting.

Following the disappointment with pixantrone, CTI received a second blow when its other late-stage asset, the blood cancer drug, tosedostat, was put on partial clinical hold following the death of a patient due to myocarditis.