CTI BioPharma said today it has acquired worldwide rights to tosedostat through concurrent deals with the anti-cancer drug’s originator Vernalis R&D, and Chroma Therapeutics, through which CTI held a sublicense covering North, Central, and South America.
CTI said it acquired all of Chroma's right, title and interest in tosedostat—as well as “certain related assets”—in exchange for issuing to Chroma $21.3 million in shares of CTI's preferred stock convertible into 9 million shares of CTI common stock. Of that preferred stock, 12% has been placed in escrow pending expiry of Chroma's indemnification obligations.
More importantly for CTI, it reached agreement with Chroma to terminate their prior license relating to tosedostat. That will eliminate up to $209 million in potential future developmental and sales milestone payments by CTI, the company said.
At the same time, CTI said, it reached a licensing deal with Vernalis to assume exclusive worldwide rights for patents, and other IP rights, to develop, market, and commercialize tosedostat and certain other analogues. The value of the licensing deal with Vernalis was not disclosed, though CTI said it agreed to make tiered royalty payments of no more than a high single-digit percentage, on a country-by-country basis, until either the expiration of relevant patents or for 10 years following commercial launch, whichever was longer.
Tosedostat is a first-in-class oral, once-daily selective inhibitor of aminopeptidases that according to CTI has demonstrated anti-tumor responses in blood-related cancers and solid tumors in Phase I/II clinical trials.
Tosedostat is currently being evaluated in multiple Phase II clinical trials for the treatment of patients with acute myeloid leukemia (AML) or high-risk Myelodysplastic Syndrome (MDS). These include an ongoing Phase II/III trial—the AML Less Intensive (LI-1) trial—being conducted by the National Cancer Research Institute Haematological Oncology Study Group under the sponsorship of Cardiff University.
In the Phase II/III trial, patients will be randomized to standard treatment, low dose cytarabine, versus one of five novel investigational treatments, one of which is tosedostat, each in combination with low dose cytarabine. The trial will utilize a “Pick a Winner” trial design, with overall survival serving as the primary endpoint.
Those trials are intended to inform the design for a Phase III registration study to support potential regulatory approval.
“Over the next year, CTI and its advisors intend to develop a registration path for tosedostat in the US and Europe. In the event of positive clinical data and productive regulatory discussions, we would intend to start a pivotal program commencing in 2016,” James A. Bianco, M.D., CTI’s president and CEO, said in a statement.
“Our portfolio strategy is to acquire novel best-in-class agents that, either as monotherapy or in combination with other therapies, can have a profound effect in the treatment of patients with blood-related cancers,” Dr. Bianco added.
Last year, Chroma released results of the Phase II OPAL study of two dosing regimens of tosedostat in elderly patients with relapsed or refractory AML showed 22% of patients achieved partial remission or better, while another 29% had stable disease result. The most marked effects appeared to have occurred in patients who had previously suffered with MDS, or those that had received previous treatment for AML with hypomethylating agents (HMA). According to Chroma, adverse events were generally mild, predictable and manageable.
On the stock deal, CTI issued to Chroma 9,000 shares of its convertible preferred stock (Series 20 Preferred Stock), of which 1,080 shares have been placed in escrow pending expiry of Chroma's indemnification obligations.
Each share of Series 20 Preferred Stock has a stated value of $2,370 per share and is convertible, subject to certain conditions, at the holder’s option any time before an automatic conversion set to occur under unspecified circumstances.
The preferred stock has no voting rights on general corporate matters, but is convertible into a total 9 million shares of common stock at $2.37 per share. Shares of the Series 20 Preferred Stock will receive dividends in the same amount as any dividends declared and paid on shares of common stock, but are entitled to preference over the common stock in unspecified liquidation events.
The preferred and common stock are subject to a lock-up agreement that calls for the shares to be eligible for sale or transfer on the following timeline: 44% of such shares after the date on which the SEC declares effective a resale registration statement that CTI has agreed to file to register the common stock underlying the Series 20 Preferred Stock; an additional 44% of such shares on the earlier of (i) 30 days after the date of effectiveness of such resale registration statement and (ii) December 31, 2014; and the remaining 12% of such shares nine months following October 24.