Cell Therapeutics is selling off its remaining 50 percent stake in its cancer drug Zevalin for $18 million, as part of a last-ditch bid to pull in enough cash to keep its doors open a little while longer.
The Seattle-based biotech company (NASDAQ: CTIC) said today it sold its remaining stake in the drug to its partner, Irvine, CA-based Spectrum Pharmaceuticals (NASDAQ: SPPI). Cell Therapeutics has said in regulatory filings that it only had enough cash left to operate through the end of February, so the new cash infusion will buy some extra time to try to maximize the value of another drug it has for non-Hodgkin’s lymphoma, called pixantrone.
Cell Therapeutics ended up selling full Zevalin commercial rights for a combined $33 million to Spectrum, since the two companies first formed a partnership in November. Cell Therapeutics originally acquired the drug in December 2007 from Cambridge, MA-based Biogen Idec for $10 million upfront, plus future milestone payments. The treatment, a targeted antibody that seeks out tumor cells while also delivering a potent dose of radiation, has shown striking effectiveness in clinical trials. But it has been a commercial dud, partly because of the complexity of administering it, and hassles with insurance reimbursement. Cell Therapeutics had hoped to breathe new life into it by applying for FDA approval in an expanded group of as many as 18,000 newly diagnosed patients in the U.S. The FDA has until April 2 to make a decision on that new group of patients.
Divesting Zevalin means that Cell Therapeutics will cut its expenses by about $15 million a year. The company expects to get $6 million from Spectrum when the sale closes, and the remaining $12 million from Spectrum within the next three months.
“CTI continues to believe in the value of Zevalin as a commercially attractive product and effective form of cancer therapy, however, with the impressive clinical trial results for pixantrone and given the company’s need for operating capital, we are compelled to exercise our option and focus our resources on pixantrone,” said Cell Therapeutics CEO James Bianco, in a statement.