Washington Editor

In a two-part arrangement, Cell Therapeutics Inc. agreed to partner Xyotax (poliglumex paclitaxel) with Novartis AG in a deal worth up to $285 million, and there's an option for another $111.5 million deal for pixantrone.

Xyotax, which is in Phase III to determine whether it improves survival in women with non-small-cell lung cancer compared to paclitaxel, is a biologically enhanced chemotherapeutic that links paclitaxel to a biodegradable polyglutamate polymer. Enrollment of 600 patients is expected to wrap up in the first quarter, and interim data on an adequate number of events, about 200 deaths, are expected by early July. Should those findings prove positive, Seattle-based CTI plans to file for approval in the U.S. and Europe to market the drug for women with lung cancer.

"We had always considered the need for a global partner in order to maximize the commercial potential for the product," CTI President and CEO James Bianco told BioWorld Today, adding that if it's approved as a gender-specific lung cancer treatment, it can have "truly blockbuster potential."

Xyotax, which reacts to the presence of estrogen's receptor on tumors, has fast-track designation from the FDA, and it could be on the U.S. market by the end of next year or early 2008 based on a priority-review timeline. Lung cancer represents the No. 1 cancer killer of women, and the female-only trial, called PIONEER 1, began late last year. (See BioWorld Today, Dec. 7, 2005.)

As part of the exclusive agreement, Novartis is making a $15 million equity investment in CTI. That share purchase, made at a premium to the stock's 10-day average, makes the Basel, Switzerland-based pharmaceutical firm one of CTI's largest investors with a stake of about 8 percent. In addition, total product registration and sales milestones could reach as much as $270 million.

Bianco praised Novartis as an "innovator" in the oncology space "looking to make not only an impact on toxicity but looking to make an impact on survival," too. Given its franchise with Gleevec (imatinib), "Novartis clearly is at the front of the pack."

Should Xyotax receive FDA approval, CTI could ride its partner's sales and marketing coattails and opt to co-detail the drug in the U.S. under the direction of Novartis. That would allow CTI to rebuild a sales force; the company shed that department last year after selling the leukemia drug Trisenox (arsenic trioxide) to Frazer, Pa.-based Cephalon Inc. for up to $170 million to secure funding in the wake of three Phase III setbacks for Xyotax. (See BioWorld Today, June 14, 2005.)

The drug missed its primary endpoint in a trio of non-small-cell lung cancer trials called the STELLAR studies, showing only equivalent survival overall instead of the hoped-for average 30 percent improvement. After the first one, CTI's stock fell by more than 47 percent. (See BioWorld Today, March 8, 2005, and May 3, 2005.)

Bianco said European regulatory authorities have agreed to accept the non-inferiority STELLAR data as a basis for approval in case PIONEER 1's interim data aren't up to par, a "fall-back strategy" because they believe Xyotax offers a benefit that lung cancer patients don't get with existing therapies.

Beyond lung cancer, the drug is being studied as a front-line treatment for ovarian and prostate cancers, and as a radiation sensitizer in esophageal, lung and head and neck cancers. An interim analysis of the 1,500-patient ovarian cancer study is expected in 2008.

The worldwide licensing deal covers all uses of Xyotax in all indications.

In the other part of the agreement, Novartis gained an option to develop and commercialize pixantrone, another Phase III cancer drug. An investigational agent for hematological malignancies, it is designed to potentially increase antitumor activity and decrease the potential for cardiac toxicity associated with currently marketed anthracyclines.

It is being studied in third-line or worse patients with non-Hodgkin's lymphoma against any existing single agents, with a primary endpoint of confirmed or unconfirmed complete remission rate. An interim analysis earlier this summer demonstrated positive data on complete response rates and time to progression in the first 40 patients, and a second look is expected in the first quarter.

That next interim analysis, which will include data on about 120 patients, could lay the groundwork for an FDA filing strategy and might trigger Novartis to opt in, Bianco said. If the option is exercised, Novartis would pay CTI a $7.5 million fee and up to $104 million in registration and sales-related milestones.

On Monday, CTI's stock (NASDAQ:CTIC) gained 13 cents to close at $2.08.

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