Cell Therapeutics acquires SMi and gains new cancer drug

US-based Cell Therapeutics has entered into an agreement to acquire privately owned Systems Medicine through a stock for stock merger valued at USD 20m.

SMi stockholders could win a maximum of USD 15m payable in either cash or shares of CTI common stock, if certain regulatory milestones are met.

Per the agreement, SMi will continue operating as a wholly-owned subsidiary of CTI, leveraging its genomic-based platform to develop CTI's oncology products, including Brostallicin.

Brostallcin is a DNA minor groove binding agent with proven anti-tumor activity and a positive safety profile in more than 200 patients treated to date in clinical trials. Brostallicin is now in phase II clinical studies. The compound was discovered at Pharmacia and developed by Nerviano Medical Sciences (NMS) of Italy, which one of the largest oncology-focused development companies in the EU.

Following the merger between Pfizer and Pharmacia, Brostallicin was signed over to NMS which continued development and then licensed worldwide rights to SMi.

A benefit of the merger for CTI is SMi's affiliation with TGen, which has an extensive genomic platform and high-throughput capabilities, which lower development risk and reduces the time a compound takes to reach the market.

Brostallicin plugs a gap in CTI's clinical pipeline, and the firm says the compound could reach the market by 2010. Other upcoming launches at the firm include    pixantrone and Xyotax (paclitaxel poliglumex, CT-2103) which may reach the market in Q1 and Q4 2009, respectively.

According to media reports and press statements, Dr Daniel D Von Hoff, who is a founder of SMi, and is director of the Clinical Translational Research Division at the Translational Genomics Research Institute (TGen), will lead CTI's strategic product portfolio committee. Richard L Love, an original founder of SMi and former founder and CEO of ILEX Oncology, is slated to join CTI's board of directors.