NantCell, one of controversial biotech entrepreneur Patrick Soon-Shiong’s many businesses, said last week that it inked a deal to acquire CytRx‘s (NSDQ:CYTR) aldoxorubicin cancer drug.
The compound has faced several obstacles in clinical trials, including when it missed the primary endpoint of a late-stage clinical trial, failing to help patients with second-line soft tissue sarcoma in a significant way compared to a control therapy.
In late 2014, the FDA put a hold on the trial after a patient using CytRx’s therapy died. The hold was lifted months later, but the biotech has claimed that the interruption stopped it from monitoring progression-free survival for half of the patients enrolled in the study.
CytRx maintains the compound’s potential, pointing to data showing that objective response rate and disease control rate nearly doubled in the aldoxorubicin branch of the study compared to the control arm.
According to the deal with NantCell, the NantWork subsidiary is slated to buy $13 million of CytRx common stock at $1.10 apiece.
Including sales royalties, CytRx could potentially reel in more than $350 million from the deal. In the meantime, NantCell is responsible for future development, manufacturing and commercialization costs.
CytRx also gave NantCell a warrant to buy up to 3 million shares of common stock at $1.10 apiece.
“We are excited to forge this new relationship with NantCell. They are committed not just to bringing aldoxorubicin to the market for patients with soft tissue sarcomas, but to expand aldoxorubicin’s potential use in combination with both immuno-oncology and cell based therapies to better serve patients suffering from cancer,” chairman & CEO Steven Kriegsman said in prepared remarks.
“This license and strategic investment will put aldoxorubicin in the hands of a committed partner who pioneered the development of albumin based chemotherapeutics, and will allow CytRx to continue to create new ultra-high potency drug candidates based on our LADR technology platform. Aldoxorubicin will clearly benefit from the first-hand experience of the NantCell management team led by Dr. Patrick Soon-Shiong, who developed and gained regulatory approval under a 505(b)(2) pathway and commercialized Abraxane, an albumin-mediated cytotoxic agent which currently grosses approximately $1 billion in annual sales.”
“Aldoxorubicin’s distinct profile makes it the first anthracycline to allow for continuous dosing without increasing cardiac toxicity which would be beneficial for the 17 indications for which doxorubicin is currently approved and other indications where it could provide benefit,” Soon-Shiong added. “We aim to rapidly incorporate aldoxorubicin into multiple treatment protocols for major tumor types like breast and brain cancers as well as sarcomas.”
CYTR shares were trading at 93¢ apiece in mid-morning activity today, up 14%.
