DOR BioPharma Inc. said a buyout offer by Cell Therapeutics Inc. cannot be considered at this time due to the company's letter of intent with a potential partner for its lead program orBec, a corticosteroid pending regulatory approval in gastrointestinal graft-vs.-host disease.
Nevertheless, news of the offer, released Friday afternoon, caused DOR's stock (OTCBB:DORB) to shoot up 80.3 percent to close at 55 cents, up 25 cents.
In an unsolicited bid, CTI offered to acquire Miami-based DOR through the issuance of 29 million shares, representing about 19.9 percent of its common stock. That deal would carry a value of about $50 million, based on CTI's Thursday closing price of $1.70. The proposal also included an additional $15 million payment to DOR shareholders, in either stock or cash, upon FDA approval of orBec. CTI's shares (NASDAQ:CTIC) closed Friday at $1.73, up 3 cents.
The acquisition "would be a good fit for our company and a win-win for both," said Dan Eramian, CTI's executive vice president of corporate communications. CTI said orBec would be "shopped to the same doctors" as pixantrone, CTI's anthracycline derivative, which is in Phase III testing in non-Hodgkin's lymphoma.
For now, however, DOR said it is unable to contemplate the buyout offer, due to a non-binding letter of intent signed earlier this month granting Gaithersburg, Md.-based Sigma-Tau Pharmaceuticals Inc. exclusive right through March 1 to negotiate a potential alliance regarding orBec (oral beclomethasone dipropionate) and other pipeline compounds. Without "express written permission from Sigma-Tau," the company's board "cannot consider Cell Therapeutics' merger proposal at this time," DOR stated in a press release. Because of the pending letter of intent, DOR was unable to comment further.
Upon signing the letter with Sigma-Tau, DOR received $3 million - $1 million in stock and $2 million in cash - but agreed to return the cash to Sigma-Tau if no agreement is reached during the next few weeks.
The FDA accepted a new drug application in November for OrBec, a two-pill system containing a topically active corticosteroid designed to target and treat upper- and lower-GI GVHD with reduced systemic immunosuppressive side effects. The NDA was based on pivotal data showing a 66 percent reduction in mortality at 200 days post-transplant. The PDUFA date was set for July 21, 2007. A separate application is pending in Europe. (See BioWorld Today, Sept. 25, 2006.)
In addition to orBec, DOR's drug development includes a biodefense division, which is working on biomedical countermeasures, including as recombinant subunit vaccines. A vaccine for exposure to ricin toxin, RiVax, has been tested successfully in a Phase I trial in healthy volunteers, and another vaccine is being developed against exposure to botulinum toxin.
Besides pixantrone, Seattle-based CTI also is developing Xyotax, a late-stage drug aimed at treating lung cancer, specifically in female patients. That product, which links paclitaxel to a biodegradable polyglutamate polymer, recently was the subject of a special protocol assessment for an upcoming Phase III study in women with advanced lung cancer.