We’ve received a few emails about Cell Therapeutics (CTIC) and the Pixantrone option from Novartis (NVS). In our opinion, a potential NVS deal is nothing more than a race between OPAXIO (paclitaxel poliglumex, XYOTAX) approval in the EU and the Pixantrone database closing. Though anything can happen at any time, here are the facts between the two contestants:

Xyotax/OPAXIO

• NVS and CTIC entered into the OPAXIO/Pixantrone (Op/pix) agreement on September 15, 2006. There’s no publicly available evidence that the agreement is for a specific time period and could be valid indefinitely. The option came with a $15M price tag for NVS.

• If OPAXIO is approved in the U.S. or the EU, then NVS has THIRTY (30) days from the approval date to pick up the rights, which is termed the Xyotax Participation Period. CTIC is eligible for up to $270M in milestones, plus royalties. Note: Xyotax was changed to OPAXIO per request of the EMEA in May 2008. We use OPAXIO and Xyotax interchangeably.

• An OPAXIO/Xyotax MAA (Marketing Authorization Application), analogous to a U.S. NDA, was submitted to the EMEA in March 2008. On April 2, 2008, the EMEA accepted the OPAXIO/Xyotax MAA. The review process for the EMEA takes 15-18 and has no PDUFA-like structure/timeline/decision date.

• If approved in the EU, we put the earliest date at July 2, 2009 and the latest at October 2, 2009.

Pixantrone

• The Pixantrone Option says that NVS can enter into a worldwide license for Pix. The terms of the license are $104M in milestones plus an upfront of $7.5M and royalties (which we hear are on the high end, abut 20-30%).

• KEY: NVS must act on the Pix Option on one of two scenarios and it is the latest to occur:

  1. THIRTY DAYS AFTER THE XYOTAX PARTICIPATION PERIOD EXPIRES, or

  2. Three hundred sixty-five (365) days after the database on the Pixantrone EXTEND trial is locked, which was November 3, 2008.

• If NVS takes OPAXIO and Pix, then the Pix milestones go down to $71M. The key is the royalties for each scenario (which have not been disclosed or even agreed upon specifically for all we know).

• The Pix database was locked on November 3, 2008 putting the 365 day date at November 3, 2009.

The Race and Assessments

Nothing is certain and NVS might walk away at any time for any reason. Based on what we’ve learned though, the clock for the home stretch of a possible deal starts on July 2, 2009, with July 2-October 2, 2009 being the critical time period, assuming the EMEA doesn’t approve OPAXIO sooner. If/Once OPAXIO gets approved, the timer starts to wind down for NVS. NVS will have 30 days to make a go/no-go. If NVS pulls the trigger, the deal could come with both drugs, just OPAXIO or just Pix. Pix could come at any time.

If it doesn’t act on OPAXIO and wants just Pix, NVS might wait for October 2, 2009 (the late-end of an EMEA approval) after which it will have 30 days to take Pix putting the deadline at November 2, 2009. Conveniently, December is when CTIC says it expects FDA approval for Pix so it will be a tight race, depending on when/if the FDA accepts the Pix NDA and if it gets priority review.

Another curiosity is that the late-end of the OPAXIO EMEA tentative ruling is almost the same as 365 days after the Pix database was locked. Off by about 30 days. This means that 30 days after the late-end of a Xyotax/OPAXIO EU approval is November 2, 2009 — one day before the first anniversary of the Pix database lock. Funny how everything just kinda fell into place, huh? Hmmmmm…

Conclusion: July is the beginning of the home stretch and should last for 3-4 months. If OPAXIO is approved, the final few legs will be a 30-day window for OPAXIO and up to a 60-day window for Pix.

Anyway, that’s what we think. Thoughts?

Image from nerve

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