CTI BioPharma Corp, a biopharmaceutical company focused on the acquisition, development and commercialization of novel targeted therapies, has acquired worldwide rights to tosedostat through concurrent transactions with Vernalis R&D Limited (Vernalis), the originator of tosedostat, and Chroma Therapeutics Ltd. (Chroma), through which CTI previously held a sublicence with respect to tosedostat in North, Central and South America.
Tosedostat is a first-in-class selective inhibitor of aminopeptidases, which are required by tumor cells to provide amino acids necessary for growth and tumour cell survival. Tosedostat is currently being evaluated in multiple phase 2 clinical trials for the treatment of patients with Acute Myeloid Leukaemia (AML) or high-risk Myelodysplastic Syndrome (MDS), which are intended to inform the design for a phase 3 registration study to support potential regulatory approval.
"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," said James A. Bianco, M.D., president and chief executive officer, of CTI. "We are committed to building our blood-related cancer franchise. We feel there is strong interest in this oral, once-daily drug candidate, which we believe is attributable to the positive clinical results to date, and we are pleased to have exclusive worldwide rights to develop tosedostat for patients in areas where there remains an unmet medical need. 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."
Under the terms of an asset purchase agreement with Chroma, CTI acquired all of Chroma's right, title and interest in tosedostat and 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, 12 per cent of which has been placed in escrow pending expiry of Chroma's indemnification obligations. Chroma and CTI also terminated their prior license agreement relating to tosedostat, thereby eliminating potential future developmental and sales milestone payments by CTI of up $209 million thereunder. Concurrently, CTI entered into a license agreement with Vernalis for the exclusive worldwide right to use certain patents and other intellectual property rights to develop, market and commercialise tosedostat and certain other analogues. Under the Vernalis licence agreement, CTI agreed to make tiered royalty payments of no more than a high single-digit percentage, on a country-by-country basis, for the longer of ten years following commercial launch or the expiration of relevant patents.
CTI will be filing a Current Report Form 8-K with the US Securities and Exchange Commission (SEC) with further information on the transaction.
An aggregate of 9,000 shares of CTI's convertible preferred stock (Series 20 Preferred Stock) were issued as consideration in the transaction with Chroma, 1,080 shares of which have been placed in escrow pending expiry of Chroma's indemnification obligations. Each share of Series 20 Preferred Stock, no par value per share, has a stated value of $2,370 per share and is convertible, subject to certain conditions, at the option of the holder at any time prior to the automatic conversion that will take place following the occurrence of certain circumstances. The Series 20 Preferred Stock is convertible into a total of 9 million shares of common stock at a conversion price of $2.37 per share of common stock. 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 a liquidation preference over the common stock in certain liquidation events. The Series 20 Preferred Stock has no voting rights on general corporate matters.
The shares of Series 20 Preferred Stock (and the underlying shares of 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 per cent 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 per cent 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 per cent of such shares nine months following October 24, 2014.
Tosedostat is an oral aminopeptidase inhibitor that has demonstrated anti-tumour responses in blood-related cancers and solid tumours in phase 1–2 clinical trials. Presently, an ongoing phase 2/3 trial is being conducted by the National Cancer Research Institute Haematological Oncology Study Group under the sponsorship of Cardiff University. In this phase 2/3 trial, referred to as the AML Less Intensive (LI-1) trial, patients will be randomised 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 utilise a "Pick a Winner" trial design.1 Overall survival will serve as the primary endpoint of this trial.