Nov 15 Baxter International Inc agreed
to develop and market Cell Therapeutics Inc's bone
marrow disorder drug for payments that could total up to $362
million, sending Cell Therapeutics' shares up more than 30
percent before the bell.
Baxter will pay $60 million up front, which includes an
equity investment of $30 million in Cell Therapeutics.
The deal gives Baxter the right to market the drug,
pacritinib, outside the United States as a treatment for other
conditions as well.
The companies will jointly market the drug in the United
States, they said in a statement on Friday.
Pacritinib is currently being tested in a late-stage trial
to treat myelofibrosis, a disorder which disrupts the body's
production of blood cells.
Baxter will buy Cell Therapeutics' convertible preferred
stock that will give it the right to about 15.7 million of the
company's shares. (link.reuters.com/qaf74v)
Cell Therapeutics, which has a market value of about $227
million, has about 130 million shares outstanding, according to
Thomson Reuters data.
Cell Therapeutics would be eligible to get up to $112
million in milestone payments, $40 million of which it may get
next year, the companies said.
The company will also be eligible for additional sales
milestone payments of up to $190 million.
Cell Therapeutics will also get royalties from Baxter on
drug sales outside the United States, and will split the profits
from sales in the country.
"This collaboration will provide additional financial
resources and commercial expertise to position us to pursue the
development, commercialization and market potential of
pacritinib," Cell Therapeutics' Chief Executive James Bianco
said in a statement.
Baxter will record a special pre-tax in-process research and
development charge of about $30 million in the fourth quarter.
Cell Therapeutics' shares were up about 24 percent at $2.17
in premarket trading.
Baxter's shares, which closed at $67.60 on Thursday on the
New York Stock Exchange, were untraded.
(Reporting By Vrinda Manocha in Bangalore; Editing by Savio