After reporting encouraging news last week from a mid-stage trial of its lead anti-cancer drug, San Diego’s MEI Pharma (NASDAQ: MEIP) said it has signed a drug development deal with the Swiss pharmaceutical group Helsinn that could eventually be worth over $464 million.
Under terms of their agreement announced today, Helsinn will pay MEI $15 million upfront, with another $5 million due after a pending Phase III study of the drug, pracinostat, begins for certain older patients who are diagnosed with acute myeloid leukemia (AML). The remaining $444 million depends on meeting future development, regulatory, and sales-based milestones, with additional future revenue tied to royalty payments in selected territories.
MEI announced last Monday that the FDA had designated pracinostat as a “breakthrough therapy” when used in combination with the chemotherapy drug azacitidine to treat newly diagnosed patients with AML who are not eligible for intensive chemotherapy, or who are 75 and older.
About 20,830 new cases of AML are diagnosed in the United States each year, afflicting patients whose average age is 67, according to the American Cancer Society. It is unusual, though, for AML patients who are 70 and older to get high doses of chemotherapy drugs like cisplatin or methotrexate, or to risk a bone marrow transplant.
MEI said the FDA’s breakthrough therapy designation was backed by a Phase II study that showed a 42 percent complete response rate and median overall survival of 19.1 months in previously untreated elderly patients who received the drug.
By the end of last week, MEI shares had gained over 23 cents, or 16 percent, to close Friday at $1.61 a share.
Negotiations with Helsinn and other potential pharmaceutical partners had been underway for some time, Gold said late Friday. “When the news hit, we were able to knock it off, and finalize everything today.”
MEI and Helsinn also plan to work together to advance pracinostat as a treatment for other diseases, including myelodysplastic syndrome (MDS), a high-risk bone marrow disorder sometimes associated with AML and other blood cancers.
The deal for pracinostat represents a comeback of sorts for MEI Pharma and a redemption for CEO Daniel Gold, who joined MEI when the company moved to San Diego from Australia in 2010. The microcap company (MEI has about 20 employees and a market valuation Friday of just under $55 million) previously operated as Marshall Edwards, and was known chiefly in Australia for fumbling a late-stage study of the drug phenoxodiol for treating ovarian cancer.
Under Gold, MEI licensed pracinostat in 2013 from a Singaporean biotech company that was liquidating its assets. At that time, it was a late-stage oral compound with a validated anti-cancer target.
In a 2013 interview with Xconomy, Gold was forthright in explaining the challenges he faced at MEI, and voiced hope that MEI would eventually collaborate with a major pharmaceutical partner.
Helsinn is a privately held pharmaceutical group that specializes in cancer supportive care. The Swiss company may be best known for Aloxi, an anti-emetic often prescribed for patients getting the chemotherapy drug azacitidine (Vidaza).
In a statement today, Helsinn Group vice chairman and CEO Riccardo Braglia said the MEI agreement “broadens our focus beyond cancer supportive care products and into the development of oncology therapeutics.”