Cephalon will use the $70 mil. acquisition of Cell Therapeutics' leukemia agent Trisenox to launch a "fully integrated" oncology franchise, the company announced June 13.

Cephalon agreed to pay CTI $70 mil. in cash, plus up to $100 mil. in milestone payments, for Trisenox (arsenic trioxide), which is indicated for relapsed or refractory acute promyelocytic leukemia.

The company appears to be attempting to build an oncology franchise with a particular focus on hematology treatments.

Cephalon is currently developing a Phase II tyrosine kinase inhibitor (CEP-701), which is being evaluated as an acute myelogenous leukemia treatment.

The company could also add Salmedix' lead candidate, the non-Hodkin's lymphoma therapy Treanda (bendamustine hydrochloride).

Cephalon agreed in May to purchase San Diego-based Salmedix for $160 mil. in cash and $40 mil in milestone payments. The acquisition is still pending, but it is expected to close by the end of the second quarter.

Cephalon said it will make employment offers to CTI's sales and commercial personnel (about 41 in total, with 8 in ex-U.S. markets).

Upon the close of the transaction, Cephalon said it will work to expand Trisenox' label: the company said it will consider pursuing a front-line indication and may evaluate the agent for the myelodysplastic syndromes market.

CTI disclosed in November that the Seattle U.S. attorney's office had launched an investigation regarding its off-label promotion of Trisenox (¹ Also see "Cell Therapeutics Responding To Inquiry Into Trisenox Off-Label Promotions" - Pink Sheet, 22 November, 2004.).

There was analyst speculation that Cephalon could be looking to make an acquisition after the company raised additional cash from a convertible note issuance in early June.

For CTI, the sale will provide net cash of $30 mil. to reinvest in its late-stage pipeline.

The company will focus its efforts on pixantrone and Xyotax . Pixantrone is in Phase III for non-Hodgkin's lymphoma; interim data are expected by the end of the year.

CTI expected to file the Xyotax (paclitaxel poliglumex) NDA by year-end; however, the application will likely be delayed following the failure of the Phase III STELLAR 2 and 4 trials to demonstrate a survival advantage in non-small cell lung cancer.

CTI said an internal restructuring, plus the transfer of its reps to Cephalon, would result in a headcount reduction of 130 in the U.S.

- Lee Kalowski

Cephalon To Develop Oncology Franchise Following Acquisition Of CTI’s Trisenox

More from Archive

More from Pink Sheet