Baxalta is ending a 3 1/2-year-old agreement with Onconova Therapeutics to license European commercialization rights to its Phase III lead candidate rigosertib.

Onconova said yesterday it received a notice from Baxalta that it will terminate the development agreement covering the cancer drug “for convenience” effective August 30. Upon termination, Onconova gains back exclusive rights to commercialize rigosertib for specified indications in Europe.

Back in December, Onconova began enrolling the first of approximately 225 patients for the Phase III INSPIRE trial, designed to assess IV rigosertib as a potential treatment for higher-risk myelodysplastic syndromes (HR-MDS) after failure of hypomethylating agent (HMA) therapy.

According to Onconova, Baxalta told its partner that continued support for INSPIRE did not align with its strategic priorities. However, oncology is one of three areas of therapeutic focus identified by Baxalta, which was known as Baxter BioScience until Baxter International spun out the global biopharmaceutical business last year. The other two areas are hematology and immunology.

“Onconova is deeply disappointed by the timing of Baxalta’s decision, given that patient enrollment in this pivotal trial for patients with short life spans and no alternative available therapies commenced only three months ago,” Onconova President and CEO Ramesh Kumar, Ph.D., said in a statement.

INSPIRE is a global, multicenter, randomized, controlled study designed to assess the efficacy and safety of IV rigosertib in HR-MDS patients under 80 years of age who had progressed on, failed to respond to, or relapsed after previous treatment with HMAs. INSPIRE continues to enroll higher-risk MDS patients who have failed all approved therapies, at multiple U.S. sites, while Onconova is opening additional clinical centers in and outside the U.S., Onconova said.

Until the termination takes effect, Onconova added, the agreement calls for Baxalta to pay half of the clinical trial costs for the INSPIRE trial, up to a specified cap. That cap is $15 million, according to Onconova’s 2014 Form 10-K annual report.

Talks are in progress with Baxalta over the amount of financial support it will need to complete the trial, Onconova said.

Onconova and Baxter inked the development agreement in September 2012 for rigosertib in MDS as well as pancreatic cancer. The companies later dropped the latter indication, and Baxter ended development last year in patients with low-risk MDS.

Baxter agreed to pay $50 million upfront to Onconova, which was eligible for precommercial milestone payments of $25 million per drug approval application filed for indications covered by the agreement and up to $100 million for marketing approval for each MDS indication.

Onconova was also eligible for up to $250 million in milestone payments tied to specified levels of net sales for rigosertib in Europe, as well as royalties at percent ranges from the low teens to the low twenties. Royalties could be lower depending on the timing of European approval for rigosertib IV for MDS and approval of competing products for the indication.

The agreement gave Onconova the option to have Baxter pay half of Phase III trial costs for HR-MDS up to $15 million in return for lowering Baxter’s milestone payments to Onconova by $15 million.