CTI BioPharma acquires worldwide rights to tosedostat

CTI BioPharma Corp. (CTI) (NASDAQ and MTA: CTIC) today announced that it 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 sublicense 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 tumor cell survival. 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.

"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 CEO 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 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.