Baxter International said today it agreed to buy the Oncaspar® (pegaspargase) leukemia product portfolio from Sigma-Tau Finanziaria for $900 million. The deal expands a presence in oncology markets for rare and orphan diseases for Baxter BioScience and its successor to be spun out later this year.
Oncaspar is a first-line biologic used as part of a multi-agent chemotherapy regimen to treat acute lymphoblastic leukemia (ALL), which is responsible for more than 80% of childhood leukemias. Oncaspar is also indicated for patients with ALL and hypersensitivity to native forms of L-asparaginase.
Oncaspar is marketed in the U.S., Germany, Poland, and other countries, generating a total $100 million in annual sales worldwide. The product is approved in the U.S. as a first line treatment, and as a second line option in select European countries.
In addition to the currently marketed formulation of Oncaspar, Baxter BioScience said, the company intends to continue development of a lyophilized formulation intended to enhance product stability to support product supply continuity.
As part of the deal, Baxter BioScience agreed to buy calaspargase pegol, a biologic in development for the treatment of ALL with an increased shelf life that according to the company is expected to reduce dosing frequency. Baxter also plans to investigate Oncaspar for potential new indications, including in additional ALL patient populations with significant unmet needs, as well as for acute myeloid leukemia (AML).
“Oncaspar is a strong strategic fit for our rapidly expanding oncology business, as it complements our R&D programs in hematologic cancers,'' David Meek, head of oncology for Baxter BioScience, said in a statement.
Since announcing plans for the spinout last year, Baxter has worked to grow its oncology offerings, hoping to tap into what the company estimates is a $10 billion market for all the indications treated by the company’s cancer products.
Baxter sold two non-cancer vaccines to Pfizer for $635 million, but acquired Chatham Therapeutics for $70 million in April 2014, followed by orphan drug developer AesRx three months later for an undisclosed price. Baxter has also trumpeted positive Phase III results for the investigational treatment pacritinib for myelofibrosis.
Earlier this month, Baxter filed for European regulatory approval for MM-398 (also called PEP02; nanoliposomal irinotecan injection or “nal-IRI”) for post-gemcitabine metastatic pancreatic cancer. Late last month, Baxter’s partner in co-developing MM-398, Merrimack Pharmaceuticals, submitted an NDA to the FDA for the drug in the same indication. Baxter acquired licensing rights outside the U.S. and Taiwan from Merrimack Pharmaceuticals for all potential indications of MM-398 in September, for up to $970 million.
Baxter said it still plans to spin out Baxter BioScience “by mid-year” into a publicly-traded biopharma to be called Baxalta.
“With Oncaspar, Baxalta will bring an established standard of care therapy to more patients worldwide through the pursuit of additional indications and regulatory approvals across the globe,” Ludwig Hantson, Ph.D., president of Baxter BioScience, said in a statement.
Baxter said the $900 million price for the Oncaspar portfolio does not reflect working capital and other transaction adjustments. The company said it expects to finance the deal through a combination of foreign cash and debt. The transaction is expected to close in the third quarter, subject to regulatory approvals and other customary closing conditions.
Baxter said its Oncaspar purchase is expected to be accretive to adjusted earnings on a cash basis in the first full year after the deal, and increasingly accretive thereafter.