Cytori Therapeutics said today it plans to acquire the liposomal nanoparticle technology platform of Azaya Therapeutics for up to $170 million, in a deal designed to expand and complement the buyer’s regenerative medicine operations.

Azaya’s Protein Stabilized Liposomes™ (PSL) platform is designed to allow for high-dose delivery of potent cytotoxics with potentially lower side effects. Cytori says its research suggests that nanoparticle liposomal technology may be a useful method of delivering targeted regenerative therapies to sites of acute or chronic injury.

As part of the transaction, Cytori will acquire from Azaya two oncology drug candidates that the company deems promising enough to generate what it called sizeable near-term, global licensing, and revenue opportunities.

One is Azaya’s lead oncology candidate ATI-0918, an off-patent, complex, generic nanoparticle liposomal formulation of the chemotherapeutic agent doxorubicin hydrochloride, used for treating breast cancer, ovarian cancer, multiple myeloma, and Kaposi’s sarcoma.

In a clinical trial, ATI-0918 showed bioequivalence to the reference drug for doxorubicin in Europe, which is marketed by Johnson & Johnson as Doxil® and Caelyx®

Cytori said it expects to begin manufacturing preparation of ATI-0918 upon closing the deal and plans to file for EU regulatory approval of ATI-0918 in early 2018, as well as seek commercialization partners for the drug. Cytori intends to manufacture ATI-0918 in Azaya’s protein-stabilized nanoparticle manufacturing and development facility in San Antonio, TX, which has recently been upgraded in anticipation of commercial scale-up—and which the company plans to lease for 5 years.

Cytori added that it is considering a follow-on study to demonstrate the bioequivalence of ATI-0918 to the reference drug in the U.S., which is marketed by Sun Pharma as Lipodox.

The other candidate, ATI-1123, is Azaya’s nanoparticle-stabilized liposomal formulation of docetaxel. Azaya reported positive safety results for ATI-1123 in a Phase I study of 29 patients with solid tumor cancers who failed other therapies.

Cytori said it plans to proceed through partners with Phase II clinical studies of ATI-1123 in multiple indications.

Terms of the acquisition call for Cytori to issue $2 million in common stock upfront and pay off about $2 million of Azaya’s trade payables. Cytori also agreed to pay Azaya up to $16.25 million in payments tied to achieving commercial milestones and up to $100 million in royalties based on product revenues.

Should any of the candidates or the ATI-1123 patent be licensed to a partner, Cytori agreed to pay Azaya up to $50 million in license/sale or other transfer fees.

“Azaya’s technology and intellectual property present an exciting opportunity to marry Cytori’s cell therapy technology, which is currently in late-stage clinical trials, to a clinically proven and patented off-the-shelf pharmaceutical delivery system directly applicable to regenerative medicine,” Cytori president and CEO Marc H. Hedrick, M.D., said in a statement.

The deal is subject to customary closing conditions, including approval from Azaya shareholders and consent from third parties, and is set to close on or before February 28.








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