MEI Pharma Inc (NASDAQ:MEIP), an oncology company focused on the clinical development of novel therapies for cancer and Helsinn, a Swiss pharmaceutical group focused on building quality cancer care products
announced that they have entered into an exclusive licensing, development and commercialization agreement for Pracinostat, a Phase III-ready drug candidate for the treatment of acute myeloid leukemia (AML) and other potential indications. The deal provides the complementary resources from both organizations to rapidly advance Pracinostat into Phase III clinical development and expand into additional indications, including high-risk myelodysplastic syndrome (MDS).
Under the terms of the agreement, Helsinn will get exclusive worldwide rights, including manufacturing and commercialization rights, and will be responsible for funding the global development of Pracinostat. As compensation for such grant of rights, MEI Pharma will receive near-term payments of $20 million, comprised of a $15 millionupfront payment and a $5 million payment upon dosing of the first patient in the upcoming Phase III study of Pracinostat in newly diagnosed AML patients unfit to receive induction therapy. In addition, MEI Pharma will be eligible to receive up to $444 million in potential development, regulatory and sales-based milestone payments, along with additional tiered royalty payments in selected territories.
As part of the development and commercialization agreement, Helsinn and MEI Pharma will also collaborate to explore an optimal dosing regimen of Pracinostat in combination with azacitidine for the treatment of high-risk MDS. This clinical study is expected to commence in the first half of 2017. In a related transaction, Helsinn will make a $5 million equity investment in MEI Pharma.
Riccardo Braglia, Helsinn Group Vice Chairman and CEO, said: “Helsinn is delighted to be entering into this agreement with MEI Pharma for the exclusive rights on Pracinostat, a promising late-stage novel asset. In the first instance we will target acute myeloid leukemia (AML), an area of huge unmet medical need. As part of the development, we will also target additional indications. Helsinn is committed to helping people to survive cancer and offer a better quality of living with cancer.
“This agreement broadens our focus beyond cancer supportive care products and into the development of oncology therapeutics. Helsinn Therapeutics (HTU), our US sales organization, will allow us to accelerate the development and commercialization of this product, once approved, as we will be able to leverage our clinical and regulatory expertise coupled with our existing oncology specialist sales organization.”
“Helsinn is an ideal strategic partner to entrust the development of Pracinostat,” said Daniel P. Gold, Ph.D., President and Chief Executive Officer of MEI Pharma. “Helsinn has a strong commercial presence in the United States and, globally, has been able to create and skillfully coordinate a solid and significant network of 70 commercial partners in 90 countries. Helsinn’s antiemetic, Aloxi®, is a market leader and is often used by patients receiving azacitidine, so their commercial organization is well positioned to market Pracinostat for the treatment of AML and MDS. Helsinn shares our enthusiasm for bringing Pracinostat to patients in need, and we look forward to a successful partnership for the development of the program.”
Dr. Gold added: “Including MDS along with AML in the development plans was a critical component to this deal, as it significantly increases the market opportunity for Pracinostat. With this agreement in place, we are now in a great position to move forward with the Phase III study in AML, optimize the development path in MDS, and maintain lucrative economics on future commercial success.”
This transaction has been approved by the boards of both companies. Destum Partners acted as an advisor to MEI Pharma on the transaction. (Original Source)
Shares of MEI Pharma jumped nearly 49% to $2.40 in pre-market trading. MEIP has a 1-year high of $2.12 and a 1-year low of $0.87. The stock’s 50-day moving average is $1.39 and its 200-day moving average is $1.33.
On the ratings front, Wedbush analyst David Nierengarten reiterated a Hold rating on MEIP, with a price target of $2, in a report issued on August 3. The current price target represents a potential upside of 24.2% from where the stock is currently trading. According to TipRanks.com, Nierengarten has a yearly average return of 33.5%, a 50.0% success rate, and is ranked #40 out of 4102 analysts.
MEI Pharma, Inc. is an oncology company, which engages in clinical development of novel small molecules for the treatment of cancer. Its portfolio of drug candidates includes Pracinostat, an oral inhibitor that is poised to enter a phase study for the treatment of elderly patients with newly diagnosed acute myeloid leukemia (AML).