Date: 2014-10-27
Type of information: Licensing agreement
Compound: tosedostat
Company: CTI BioPharma - previously known as Cell Therapeutics (USA - WA) Vernalis (UK) Chroma Therapeutics (UK)
Therapeutic area: Cancer - Oncology
Type agreement: licensing
Action mechanism: Tosedostat is an oral aminopeptidase inhibitor that has demonstrated anti-tumor responses in blood-related cancers and solid tumors 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 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.1 Overall survival will serve as the primary endpoint of this trial.
Disease: acute myeloid leukemia
Details: * On October 27, 2014, CTI BioPharma announced that it has acquired worldwide rights to tosedostat through concurrent transactions with Vernalis R&D Limited, the originator of tosedostat, and Chroma Therapeutics, through which CTI previously held a sublicense with respect to tosedostat in North, Central and South America. Tosedostat is currently being evaluated in multiple Phase 2 clinical trials for the treatment of patients with Acute Myeloid Leukemia (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. \"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.\" said James A. Bianco, M.D., President and CEO of CTI.
Financial terms: 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 percent 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 commercialize tosedostat and certain other analogues. Under the Vernalis license 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. 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 percent 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 percent 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 percent of such shares nine months following October 24, 2014.
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