Nov 15 (Reuters) - 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 D‘Souza)