Cephalon, Inc. has signed an agreement with Cell Therapeutics, Inc. and CTI Technologies, Inc., a wholly owned subsidiary of Cell Therapeutics, under which it will acquire all assets related to Trisenox (arsenic trioxide) injection for approximately $70 million cash. The agreement provides for future cash payments to CTI, totalling up to $100 million, upon the achievement of certain label expansions and sales milestones.

Following the acquisition, Cephalon will assume the worldwide marketing, sales and development of Trisenox. In 2004, worldwide sales of Trisenox were $26.6 million. Cephalon will offer employment to CTI sales and commercial personnel now supporting the Trisenox brand. The acquisition is subject to the approval of regulatory agencies, and is expected to close in the third quarter of 2005. Cephalon anticipates the transaction will be neutral to its 2005 earnings, a press release stated.

Trisenox was approved for marketing in the United States and Europe in 2000 and 2002, respectively, for the treatment of patients with relapsed or refractory acute promyelocytic leukaemia (APL), a life-threatening haematological cancer. In clinical trials, Trisenox has been shown to provide high complete response rates (70-75 per cent) and a high molecular remission rate (82 per cent) in patients with relapsed disease. Numerous studies of Trisenox are being conducted by independent investigators in a variety of haematological cancers.

"With Trisenox for APL and its associated commercial infrastructure, Treanda for non-Hodgkin's lymphoma from the pending acquisition of Salmedix, and the promise of CEP-701 for acute myeloid leukaemia, we are building a fully integrated oncology business," said Frank Baldino, Jr., Ph.D., chairman and CEO of Cephalon.

"This acquisition allows us to enter the oncology market with a foundation of experienced sales and scientific personnel in oncology," added Robert Roche, executive vice president, Worldwide Pharmaceutical Operations. "Cephalon has demonstrated success in focusing commercial and scientific resources to maximize the value of early stage commercial products. We believe we have a similar opportunity to make Trisenox a mainstay in our growing oncology portfolio."

In connection with the transaction, Cephalon also will re-acquire rights to its proteasome inhibitors, which are currently in pre-clinical development under a co-development agreement with CTI. Proteasomes are enzymes that play a role in regulating cell function and growth. The goal of this proteasome inhibitors program is to develop a new and improved therapy for multiple myeloma.

APL is one of eight subtypes of acute myeloid or myelogenous leukaemia (AML). According to the American Cancer Society, approximately 12,000 patients are diagnosed with AML in the United States every year, 10 to 15 percent of whom will have the APL subtype. Research indicates that approximately 10 to 30 percent of patients with APL will not respond to, or will relapse from first-line therapy.

Trisenox is believed to have multiple mechanisms of action including, induction of programmed cell death (apoptosis) and damage and degradation of the fusion protein PML/RAR. Trisenox is indicated for the induction of remission and consolidation in patients with acute promyelocytic leukaemia (APL) who are refractory to, or have relapsed from, retinoid and anthracycline chemotherapy and whose APL is characterized by the presence of the t (15;17) translocation or PML/RAR-alpha gene expression.