On January 9, 2017 Moderna Therapeutics, a clinical stage biotechnology company that is pioneering messenger RNA (mRNA) Therapeutics to create a new generation of transformative medicines for patients, provided a business update today at the 35th Annual J.P. Morgan Healthcare Conference in San Francisco, Calif (Press release, Moderna Therapeutics, JAN 9, 2017, View Source [SID1234517364]). Moderna’s Chief Executive Officer, Stéphane Bancel, highlighted the company’s current development pipeline, which includes 12 mRNA development candidates (DCs), including vaccines and therapeutics across three therapeutic areas: infectious diseases, immuno-oncology and cardiovascular disease. Clinical studies for five of the DCs are now underway in the U.S., Europe and Australia. Among these is Moderna’s Zika mRNA vaccine, mRNA-1325, which the company progressed from idea to first-in-human study in 12 months. Moderna has filed two additional investigational new drug (IND) applications with the U.S. Food & Drug Administration (FDA); one of these INDs is now open and the other was filed in late December 2016.

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"With clinical studies underway for five medicines, 332 healthy subjects dosed thus far, and seven additional development candidates advancing to the clinic, we have rapidly pivoted from a discovery company to a development company with a pipeline of unusual breadth and depth. Moderna is at an inflection point," said Stéphane Bancel, Chief Executive Officer of Moderna. "We’ve invested heavily in our mRNA platform, research engine and early development engine to build the world’s leading mRNA company. With this infrastructure in place, we are now able to advance high-quality mRNA medicines with a breadth, speed and scale not common in our industry. Among our 2016 highlights, we are particularly proud that we were able to move our Zika mRNA vaccine candidate from initial concept to clinical study in just 12 months in response to the urgent need for a safe and effective Zika vaccine. I want to thank the Moderna team and our partners for their significant achievements over the past year to advance the promise of mRNA medicines for patients."

A live webcast of the presentation can be accessed in the Newsroom section of Moderna’s website at modernatx.com. A replay of the webcast will be archived on Moderna’s website for at least 30 days following the presentation.

MODERNA’S mRNA DEVELOPMENT PIPELINE – OVERVIEW AND DC HIGHLIGHTS
Modality-Centric Approach

mRNA is a fundamental component of human biology and, used as a drug, directs cells in the body to produce proteins to fight or prevent disease. Moderna combines elements of its mRNA platform into distinct approaches, called modalities, to address diseases. Moderna is advancing multiple modalities, which are technological solution sets that can be deployed to create a family of medicines for different diseases within one therapeutic area, and often across therapeutic areas.

Moderna’s current DCs utilize two of the company’s modalities: vaccines and localized therapeutics. The vaccines modality is being applied to advance mRNA-based viral vaccines for multiple infectious diseases, as well as mRNA-based personalized cancer vaccines. Both the viral vaccines and personalized cancer vaccines are delivered via intramuscular (IM) injection. The localized therapeutics modality is being applied to advance mRNA-based immuno-oncology therapeutics, delivered via intratumoral (iTu) injection, as well as mRNA-based therapeutics for cardiovascular disease and other ischemic vascular diseases.

Other modalities Moderna is pursuing in discovery include intravenous (IV) systemic therapeutics, IV liver therapeutics and inhaled pulmonary therapeutics. Moderna’s development pipeline includes the use of in-licensed delivery technologies as well as proprietary, next-generation delivery technologies.

Development Candidates (DCs) – By Modality and Therapeutic Application

Vaccines Modality (IM Injection)
Therapeutic Application #1 – Infectious Diseases/Viral Vaccines

mRNA-1440 and mRNA-1851 – Enabling rapid assessment of platform safety and efficacy
Moderna strategically selected its first two DCs with the goal of quickly assessing both the safety and efficacy of its mRNA platform in humans. These two DCs target influenza strains with pandemic potential: mRNA-1440 for influenza A subtype H10N8 and mRNA-1851 for influenza A subtype H7N9.

Because these strains are not circulating in the general population where the trials are taking place (the U.S. and Germany), Moderna is able to study the efficacy of its vaccine technology in naïve patient populations. Therefore, antibodies present in subjects’ blood after treatment with mRNA-1440 and mRNA-1851 are likely attributed to Moderna’s vaccines and not to active immunity as a result of previous exposure to the virus. To strengthen the quality of its clinical research, Moderna has conducted these trials with 25 percent of healthy subjects getting placebo.

In addition, studying these influenza strains is allowing Moderna to measure vaccine efficacy against a well-understood endpoint, the hemagglutination inhibition assay, or HAI. HAI is used by FDA and World Health Organization (WHO) to measure how well antibodies bind to and inactivate an influenza virus. Vaccines demonstrating titers of 1:40 are considered effective in reducing the risk for influenza infection and are, thus, approved as seasonal flu vaccines.

mRNA-1440 – Influenza A virus subtype H10N8 vaccine: Influenza A subtype H10N8 has infected three people in China in 2013, resulting in two deaths. If H10N8 were to become a pandemic, there is no approved vaccine. A Phase 1 study of healthy volunteers conducted in Europe has completed enrollment, with a total of 201 subjects enrolled. The study remains active, with subjects continuing to be followed. Moderna plans to publish topline study findings in 2017 and complete findings in 2018 upon completion of the study and full data analysis.

mRNA-1851 – Influenza A virus subtype H7N9 vaccine: Influenza A subtype H7N9 has a high potential of becoming a pandemic. More than 600 cases have been reported to date in China, with a mortality rate of approximately one in three people infected. There is no approved vaccine against this strain. A Phase 1 study of healthy volunteers is underway in the U.S., with 104 healthy volunteers dosed to date.

mRNA MRK-1777 – Viral vaccine for undisclosed indication: This viral vaccine is a Merck-partnered program. Under the terms of the collaboration and license agreement Moderna announced with Merck in 2015, Moderna is conducting a Phase 1 study of mRNA MRK-1777 in healthy volunteers, which is underway in Australia.

mRNA-1388 – Chikungunya virus vaccine: Chikungunya typically causes mild fever and transient joint pain. In approximately 15 percent of infected patients, it can cause long-term, severe arthritis. Chikungunya historically has been limited to warmer climates in Asia and Africa, but recent cases have been identified in the Americas and Europe. There is no approved vaccine for Chikungunya. Development of mRNA-1388 is funded through an award from the Defense Advanced Research Projects Agency (DARPA), an agency of the U.S. Department of Defense. An IND application for mRNA-1388 has been filed with the FDA.

mRNA-1325 – Zika virus vaccine: The Zika virus is a rapidly emerging pandemic with potential long-term public health implications. Zika is primarily transmitted by mosquitos, but can also be transmitted sexually. Children born to mothers infected with Zika can develop microcephaly, a severe disease characterized by small, not fully developed heads and severe disabilities. Recent data shows that 42 percent of Zika-infected pregnancies result in structural brain damage to the baby. Zika is also thought to cause the autoimmune condition Guillain-Barré syndrome in adults. There is no treatment or approved vaccine for Zika.

In response to the urgent global threat Zika presents, Moderna advanced mRNA-1325 from concept to first-in-human study in 12 months. A Phase 1/2 study is now enrolling healthy volunteers in the U.S.

In September 2016, Moderna announced a funding award of up to $125 million from the Biomedical Advanced Research and Development Authority (BARDA), a division of the Office of the Assistant Secretary for Preparedness and Response (ASPR) within the U.S. Department of Health and Human Services (HHS), to accelerate development of its Zika mRNA vaccine. To date, BARDA has granted $52 million of the award to Moderna to support its Phase 1 clinical study, toxicology studies, vaccine formulation and manufacturing. The agreement includes additional funding options up to $73 million to support Phase 2 and Phase 3 clinical studies.

mRNA-1706 – Zika virus vaccine (proprietary formulation): Moderna is advancing a second version of its Zika mRNA vaccine that contains the same active pharmaceutical ingredient (API) as the mRNA-1325 Zika mRNA vaccine, but utilizes one of the company’s next generation, novel formulations, V1GL. Good Laboratory Practice (GLP) toxicology studies are currently underway for mRNA-1706.

mRNA-1647 – Cytomegalovirus (CMV) vaccine: CMV leads to severe disease in two populations: newborns and transplant patients. CMV is the most common cause of newborn disability, leading to deafness, microcephaly (small, not fully developed heads and severe disabilities), vision loss and mental deficiencies, among other serious complications. It is also the most frequent viral disease in transplant recipients, often leading to transplant failure. There is no approved vaccine for CMV.

The majority of neutralizing antibodies the body produces to fight CMV infection are against the CMV Pentamer complex, which consists of five proteins (gH, gL, UL128, UL130 and UL131A). Producing the CMV Pentamer recombinantly has proven very difficult. There has been no success to date developing a CMV vaccine. Moderna’s mRNA platform has afforded the company the ability to rationally design a CMV vaccine that is capable of expressing the CMV Pentamer; the five components of the Pentamer are designed to act as a single antigen. mRNA-1647 combines six mRNAs to express the CMV Pentamer and another CMV antigen, the herpesvirus glycoprotein (gB) protein.

mRNA-1653 – Human Metapneumovirus (HMPV) and Parainfluenza virus (PIV3) vaccine: Most children have been infected at least once with both HMPV and PIV3 by age five. These viruses typically cause mild respiratory illness, but can become severe in young children, the elderly and other immunocompromised adults. HMPV and PIV3 are the second and third most common causes, respectively, of lower respiratory hospitalizations in children, behind RSV. There is no approved vaccine for either HMPV or PIV3. mRNA-1653 combines mRNAs encoding for viral antigens associated with both HMPV and PIV3.

Vaccines Modality (IM Injection)
Therapeutic Application #2 – Personalized Cancer Vaccines

mRNA-4157 – Personalized Cancer Vaccines: Moderna, in partnership with Merck, is developing an mRNA-based personalized cancer vaccine to prime the immune system to recognize cancer cells and mount a strong, tailored response to each individual patient’s cancer. Moderna will identify neoantigens present in each patient’s specific tumor and will create a personalized vaccine encoding for approximately 20 unique neoantigens. When injected into the body, the mRNA directs cells to produce and express these neoantigens. In turn, this activates the immune system to better recognize and destroy the cancer cells. Moderna’s mRNA-based personalized cancer vaccine has the potential to be synergistic with checkpoint inhibitor therapies, including its partner Merck’s anti-PD-1 therapy, KEYTRUDA (pembrolizumab).

Leveraging its rapid cycle time, small-batch manufacturing technique and digital infrastructure, Moderna plans to manufacture and supply its personalized cancer vaccines tailored to individual patients within weeks.

Localized Therapeutics Modality
Therapeutic Application #1 – Immuno-Oncology Therapeutics (Intratumoral, or iTu, Injection)

mRNA-2416 – OX40L Immunotherapy: OX40 Ligand, or OX40L, is a powerful co-stimulatory protein that enhances the expansion, function and survival of T cells to mount an attack against cancer cells. Moderna is investigating the potential effect of iTu injection of mRNA encoding for the OX40L protein into a tumor. When mRNA-2416 is delivered directly into a tumor, cells in the tumor express the OX40 ligand protein on their surface, which, in turn, may lead to a stronger T cell attack against the tumor. Additionally, Moderna is investigating the potential for mRNA-2416 to elicit an abscopal effect in metastatic cancer, in which localized injection into one tumor would lead not only to shrinking of that tumor but also shrinking of tumors elsewhere in the body. Combining mRNA-2416 with a checkpoint inhibitor may improve outcomes from cancer therapy.

An IND for mRNA-2416 has been filed with the FDA.

mRNA-2905 – IL-12 Immunotherapy: Interleukin 12, or IL-12, is a powerful cytokine that activates the immune system after being released from cells. Moderna, in partnership with AstraZeneca, is investigating the potential effect of iTu injection of mRNA encoding for the IL-12 protein. When mRNA-2905 is delivered directly into a tumor, cells in the tumor express IL-12 at a high concentration in the local microenvironment, which, in turn, may lead to a stronger T cell attack against the tumor. By expressing IL-12 locally, systemic side effects that previously have been seen from delivery of IL-12 protein into the blood may be more manageable. Moderna is also investigating the potential of mRNA-2905 to elicit an abscopal effect in metastatic cancer, in which localized injection into one tumor would lead not only to shrinking of that tumor but also shrinking of tumors elsewhere in the body. Combining mRNA-2905 with a checkpoint inhibitor may improve outcomes from cancer therapy.

mRNA-2905 is being developed through a collaboration Moderna announced in early 2016 with AstraZeneca to discover, co-develop and co-commercialize immuno-oncology mRNA therapeutics. Under the terms of the agreement, Moderna is leading discovery efforts and preclinical development, and AstraZeneca will oversee early clinical development (led by MedImmune). GLP toxicology studies are currently underway for mRNA-2905. Moderna and AstraZeneca will share the costs of late-stage clinical development. The two companies will co-commercialize resulting products in the U.S. under a 50:50 profit sharing arrangement.

Localized Therapeutics Modality
Therapeutic Application #2 – Cardiovascular Therapeutics (Intracardiac Injection)

mRNA AZD-8601 – VEGF-A: mRNA AZD-8601 is an investigational mRNA-based therapy being developed by AstraZeneca that encodes for vascular endothelial growth factor-A (VEGF-A). Using mRNA to initiate a strong, local and transient surge of VEGF-A expression could help overcome challenges associated with previous approaches to regulate this protein in tissues. When directed via local tissue injection, VEGF-A mRNA may potentially lead to the creation of more blood vessels and improved blood supply. mRNA AZD-8601 could one day provide a unique regenerative treatment option for patients with heart failure or after a heart attack, as well as for diabetic wound healing and other ischemic vascular diseases.

A Phase 1 safety study is currently enrolling patients in Europe. This study is a randomized, single-blind, placebo-controlled, single ascending dose study in male patients with Type 2 diabetes mellitus, performed at a single study center. This study is an essential first step to proving the clinical value of mRNA VEGF-A expression in cardiometabolic diseases.

2016 BUSINESS UPDATES AND HIGHLIGHTS

2016 Partnerships

Immuno-Oncology Collaboration with AstraZeneca: In January, Moderna announced a new collaboration with AstraZeneca to discover, co-develop and co-commercialize immuno-oncology mRNA therapeutic candidates. The collaboration is in addition to the exclusive agreement announced by the companies in 2013 to develop mRNA therapeutics for the treatment of cardiovascular, metabolic and renal diseases as well as selected targets in oncology.
Inclusion of New Infectious Disease Vaccine Program with Merck: In January, Moderna announced that Merck licensed a vaccine program against an undisclosed viral target, including mRNA 1566 and a set of related novel vaccine candidates, as part of the ongoing collaboration between the companies. The inclusion of this new program, which was not part of the original collaboration agreement, follows the rapid progress made in the first year of the collaboration.

Global Health Partnership with the Bill & Melinda Gates Foundation: Moderna also announced in January a partnership with the Bill & Melinda Gates Foundation to advance the development of a novel, affordable combination of mRNA-based antibody therapeutics to help prevent human immunodeficiency virus (HIV) infection. The global health partnership has the potential for follow-on projects to develop additional mRNA-based projects for various infectious diseases.

Personalized Cancer Vaccines Collaboration with Merck: In June, Moderna announced a new strategic collaboration with Merck to advance novel mRNA-based personalized cancer vaccines with KEYTRUDA (pembrolizumab) for the treatment of multiple types of cancer. The collaboration will leverage Moderna’s rapid cycle time, small-batch manufacturing and digital infrastructure to supply vaccines tailored to individual patients within weeks. Under the terms of the agreement, Merck made an upfront cash payment to Moderna of $200 million, which Moderna is using to lead all research and development efforts through proof of concept.

Research Collaboration with Vertex in Cystic Fibrosis: In July, Moderna announced an exclusive research collaboration and licensing agreement with Vertex Pharmaceuticals to discover and develop mRNA therapeutics for the treatment of cystic fibrosis (CF). The three-year collaboration will focus on the use of mRNA therapeutics, administered via pulmonary delivery, to treat the underlying cause of CF by enabling cells in the lungs to produce functional copies of the cystic fibrosis transmembrane conductance regulator (CFTR) protein, which is known to be defective in people with CF.

BARDA Funding Award for Zika mRNA Vaccine: In September, Moderna announced that it had received a BARDA funding award of up to $125 million for mRNA-1325, an investigational Zika vaccine. To date, BARDA has granted $52 million of the award to Moderna to support its Phase 1 clinical study, toxicology studies, vaccine formulation and manufacturing. The agreement includes options for additional funding up to $73 million to support Phase 2 and Phase 3 clinical studies.

2016 Infrastructure Investments and Achievements

Build-out of Good Manufacturing Practices (GMP) mRNA Clinical Manufacturing Facility: In September, Moderna announced the build-out of a state-of-the-art GMP clinical manufacturing facility to support its growing number of clinical programs. Moderna is making an initial investment of $110 million to build out the 200,000-square-foot facility, located in Norwood, Mass. The facility will enable the manufacture, quality, control and supply of clinical grade mRNA therapies and vaccines for GLP toxicology studies as well as Phase 1 and Phase 2 clinical studies. At the site, which is expected to open in mid-2018, Moderna will carry out fully integrated manufacturing activities—from raw material production to active pharmaceutical ingredients (APIs), formulation, filling and finish.

Continued Expansion of Internal Expertise:
​Key Leadership Hires: In October, Moderna welcomed two key senior additions. Bolstering its scientific team, the company appointed Melissa Moore, Ph.D., as Chief Scientific Officer of its mRNA Research Platform. Previously a member of Moderna’s Scientific Advisory Board, Dr. Moore joined Moderna from the University of Massachusetts Medical School (UMMS), where she served as Professor of Biochemistry & Molecular Pharmacology, Eleanor Eustis Farrington Chair in Cancer Research and Investigator at the Howard Hughes Medical Institute (HHMI). In addition, Moderna appointed Annie Seibold Drapeau as Chief Human Resources Officer. Most recently an Operating Partner at Bain Capital Private Equity, Ms. Drapeau is leading Moderna’s talent and organizational strategy to support its continued growth and advancement of its mRNA pipeline.

Growth across the Organization: In 2016, Moderna expanded its headcount from approximately 325 to more than 500 team members.

Ranked Third Top Employer in Biopharma Industry by Science: For the second consecutive year, Moderna was named among the industry’s best employers by Science and Science Careers’ annual Top Employer survey. Moderna ranked #3 this year, moving up four spots from the 2015 Top Employer survey. The survey polls employees across the globe in biotechnology, biopharmaceutical, pharmaceutical and related industries to rate companies on various key characteristics to arrive at a list of the 20 best employers.

Recognized by The Boston Globe in its 2016 Top Places to Work Feature: Moderna was recognized by The Boston Globe as one of the top employers in Massachusetts in its annual Top Places to Work feature. Among the hundreds of life sciences companies in Mass., Moderna was only one of six companies from the pharmaceutical / biopharmaceutical and life science categories included in this year’s Top Places to Work list.

Transitioned to SAP for Finance Business Processes: At the end of 2016, Moderna took another important step toward becoming a fully digital biotech company with the implementation of SAP for finance business processes and materials receiving. The roll-out of a highly integrated enterprise resource planning (ERP) solution is a critical component of preparing for the launch of Moderna’s Norwood, Mass., GMP clinical manufacturing facility. The deployment of SAP will enable Moderna to scale as a company, efficiently and in an integrated fashion, as it advances its mission to deliver a new generation of transformative medicines for patients.

2016 Financials

Strengthened Balance Sheet with New Equity Financing: In September, Moderna announced the close of a $474 million equity financing, which included strong support from existing institutional investors, pharmaceutical partners and new institutional investors from the U.S., Europe and Asia.

Granted First Two Tranches of BARDA Funding for Zika mRNA Vaccine: In September 2016, Moderna announced a funding award of up to $125 million from BARDA to accelerate development of its Zika mRNA vaccine. To date, BARDA has granted $52 million of the $125 million award to Moderna to support its Phase 1 clinical study, toxicology studies, vaccine formulation and manufacturing. This includes the granting of an initial $8 million in September and in December the granting of a second, tranche of $44 million.

Over $1 Billion in Cash Inflows and Available Grants in 2016: In addition to the $474 million equity financing, Moderna received $36 million in reimbursement and product milestones from its collaborators. Also, upfront payments from new collaborations signed in 2016, plus a technical milestone from an existing collaboration, brought in $290 million. When considered with the $225 million in potentially available funding from grants and awards from foundations and government agencies, Moderna accessed over $1 billion of cash and available grants during the year.

Strong Cash Position Affords Several Years of Runway: As of December 31, 2016, Moderna had $1.307 billion in cash, as compared to $802 million as of December 31, 2015. This affords Moderna several years of runway to support its continued growth and pipeline acceleration.

Investments in the Business: Moderna’s gross cash investment in the business totaled approximately $300 million in operating expense and capital expenditures. Net of reimbursements and product milestones, approximately $260 million of cash was used for operating expense and capital expenditures.

"In 2017, we will remain focused on progressing our current development candidates to and through the clinic; discovering and bringing forth additional mRNA medicines as new development candidates; and continuing to invest heavily in our mRNA platform as well as the build-out of our GMP clinical manufacturing facility in Norwood, Mass. We also look forward to begin publishing data on our clinical programs as well as key insights related to our platform," said Stéphane Bancel, Moderna’s Chief Executive Officer. "And we will continue to invest in building our team and working diligently to ensure that our employees continue to feel inspired and empowered every day to innovate and drive impact for patients."

On January 9, 2017 Takeda Pharmaceutical Company Limited (TSE:4502) ("Takeda") and ARIAD Pharmaceuticals, Inc. (NASDAQ:ARIA) ("ARIAD") reported that they have entered into a definitive agreement under which Takeda will acquire all of the outstanding shares in ARIAD for $24.00 per share in cash, or an enterprise value of approximately $5.2 billion (Press release, Ariad, JAN 9, 2017, View Source;p=RssLanding&cat=news&id=2234958 [SID1234517324]). The transaction has been approved unanimously by the boards of directors of both companies, and is expected to close by the end of February 2017, subject to required regulatory approvals and other customary closing conditions. Sarissa Capital, the holder of 6.6% of ARIAD’s common shares, as well as each of the members of ARIAD’s Board of Directors have agreed to tender their shares to Takeda pursuant to the offer.

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"The acquisition of ARIAD is a unique opportunity that will enable us to positively impact the lives of more patients worldwide, advance our strategic priorities and generate attractive returns for our shareholders," said Christophe Weber, president and chief executive officer of Takeda. "This is a very exciting time for Takeda as we will broaden our hematology portfolio and transform our global solid tumor franchise through the addition of two innovative targeted therapies. Opportunities to acquire such high-quality, complementary targeted therapies do not come often, and we are very excited about the potential for this transaction to benefit patients, our shareholders and other stakeholders."

Paris Panayiotopoulos, president and chief executive officer of ARIAD, said, "We are very pleased to combine with Takeda, which will allow us to not only accelerate our mission to discover, develop and deliver precision therapies to patients with rare cancers, but also deliver immediate and meaningful value to our shareholders through a substantial cash premium. This exciting transaction is a testament to the hard work and dedication of ARIAD’s talented team of employees. We have tremendous respect for Takeda, and I believe our shared commitment to innovation and research-driven cultures will provide for a smooth transition."

"This transaction is a great outcome for shareholders of ARIAD and Takeda. Both ARIAD and Takeda are passionate about helping cancer patients, and I believe the talent and resources of Takeda coupled with ARIAD’s pipeline and people will accelerate the development of cancer treatments. I would like to extend my deepest gratitude to the management team and everyone at ARIAD for their unrelenting dedication," said Alexander J. Denner, Ph.D., Chairman of the Board of ARIAD.

Highly strategic deal which transforms global oncology portfolio and pipeline by expanding into solid tumors and reinforcing existing strength in hematology

The acquisition of ARIAD brings two innovative targeted therapies that will expand and enhance Takeda’s existing oncology portfolio. Brigatinib, an investigational drug product, has the potential to add a differentiated, global therapy in a genetically-defined subpopulation of non-small cell lung cancer (NSCLC). The addition of Iclusig will broaden Takeda’s strong hematology franchise to include chronic myeloid leukemia (CML) and a subset of acute lymphoblastic leukemia (ALL). Together, these two innovative targeted therapies will position Takeda for sustainable long-term growth in oncology.

Takeda’s track record of successful oncology product launches [ADCETRIS (Brentuximab Vedotin), NINLAROTM (ixazomib) and VELCADE (bortezomib)] means it has the experience and expertise required to deliver the successful launch of brigatinib and to ensure that it achieves global reach and share of voice thereafter.

Accretive to Takeda’s Underlying Core Earnings by FY2018 and generates immediate and long-term revenue growth

The transaction is a compelling opportunity for Takeda shareholders. It will provide immediate revenue, bring considerable long-term revenue potential and deliver synergy savings.

ARIAD provided calendar year 2016 revenue guidance for Iclusig of $170-180 million, and Takeda expects significant long-term revenue potential from the two lead assets.

Takeda projects the acquisition of ARIAD to be accretive to Underlying Core Earnings by FY2018 and broadly neutral in FY2017. Strong revenue growth and synergy savings will offset increased sales and marketing costs for the brigatinib launch.

Attractive value drivers include two very innovative medicines, Iclusig and brigatinib, an exciting early stage pipeline and cost synergies

Iclusig, a commercialized therapy with continued strong sales growth potential, delivers immediate value. Brigatinib, an investigational drug product with peak annual sales potential of over $1 billion, will generate significant long-term value for Takeda. U.S. approval is expected in the first half of 2017 with global filing thereafter. Beyond Iclusig and brigatinib, ARIAD’s commitment and expertise in targeted kinase inhibition linked to strong translational science generated further pipeline opportunities which provide additional long-term upside potential.

Takeda will leverage ARIAD’s R&D capabilities and platform, and largely absorb its R&D costs within Takeda’s existing R&D budget. G&A cost synergies will be fully captured by FY2018.

Takeda retains financial flexibility with no impact on dividend policy

The transaction will be funded by up to $4.0 billion of new debt and the remainder from existing cash. FY2017 Net Debt/EBITDA is estimated at approximately 2.6x, which is expected to remain investment grade. The transaction has no impact on Takeda’s dividend policy.

Transaction terms

The acquisition is structured as an all cash tender offer by a subsidiary of Takeda for all of the outstanding shares of ARIAD common stock, followed by a merger in which remaining shares of ARIAD would be converted into the right to receive the same $24.00 cash per share price paid in the tender offer and ARIAD will become an indirect wholly owned subsidiary of Takeda.

The transaction is subject to the tender of a majority of the outstanding shares of ARIAD common stock as well as other customary closing conditions, including expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the antitrust laws of applicable foreign jurisdictions. The transaction is expected to close by the end of February 2017.

Takeda Pharmaceuticals U.S.A, a wholly owned subsidiary of Takeda, has established Kiku Merger Co., Inc. to effect the transaction.

(1) Tender offeror Kiku Merger Co., Inc.
(2) Target company ARIAD Pharmaceuticals, Inc.
(3) Class of shares to be acquired Common stock
(4) Tender offer price $24.00 per share
(5) Acquisition amount
(Aggregate tender offer price)
Approximately $5.4 billion (estimate)
* The amount is an estimated amount calculated by multiplying the number of the target company’s shares (fully diluted basis) by the tender offer price per share. It does not include advisory fees.
(6) Payment Cash
* Funded by up to $4.0 billion of new debt and the remainder from existing cash.
(7) Period of tender offer From January, 2017 to February, 2017
** The initial period of the tender offer will commence within 10 business days following execution of the merger agreement with ARIAD [January 8, 2017 (U.S.)], and will close 20 business days after commencement. If the situation arises whereby the conditions of the tender offer are not satisfied, the period of the tender offer will be extended, but the extension period will not exceed May 2017 (or August 2017 if antitrust clearance not received).
(8) Minimum number of shares to be purchased Consummation of the tender offer will occur once the majority of shares outstanding of the company have been tendered and other customary closing conditions have been satisfied.
(9) Financial advisor to Takeda Evercore Partners
(10) Legal counsel to Takeda Cleary Gottlieb Steen & Hamilton LLP
(11) Financial advisor to ARIAD J.P. Morgan Securities LLC, Goldman, Sachs & Co., Lazard
(12) Legal counsel to ARIAD Paul, Weiss, Rifkind, Wharton & Garrison LLP

Overview of ARIAD

(1) Company name ARIAD Pharmaceuticals, Inc.
(2) Headquarters 125 Binney Street, Cambridge, Massachusetts 02142, USA
(3) Representative Paris Panayiotopoulos, President and Chief Executive Officer
(4) Business description ARIAD Pharmaceuticals, Inc., headquartered in Cambridge, Massachusetts is focused on discovering, developing and commercializing precision therapies for patients with rare cancers. ARIAD is working on new medicines to advance the treatment of rare forms of chronic and acute leukemia, lung cancer and other rare cancers. ARIAD utilizes computational and structural approaches to design small-molecule drugs that overcome resistance to existing cancer medicines.
(5) Capital US$1,339 million (Additional paid-in capital as of December 31, 2015)
(6) Date of establishment April, 1991
(7) Major shareholders
and percentage of
shares held*
Wellington Management Group LLP 8.8%
FMR LLC 7.8%
Vanguard Group Inc. 6.8%
Others
(8) Relationships between Takeda Capital relationship Not applicable
Personnel relationship Not applicable
Transactional relationship Not applicable
(9) Operating result and financial conditions for the last three years (consolidated)
Accounting period Fiscal year ended December 31, 2013 Fiscal year ended December 31, 2014 Fiscal year ended December 31, 2015
Net assets
(US$ in thousands)
185,517 80,801 (103,141)
Total assets
(US$ in thousands)
370,894 603,116 546,692
Net assets per share
(US$)
1.01 0.43 (0.55)
Revenue
(US$ in thousands)
45,561 105,412 118,804
Operating profit
(US$ in thousands)
(273,566) (160,195) (217,276)
Net loss
(US$ in thousands)
(274,158) (162,602) (231,156)
Net loss per share
(US$)
(1.49) (0.87) (1.23)

* As reported in the 13F filings. Percentage of shares is calculated by dividing the number of shareholdings (as of the end of September 2016) by the number of total shares outstanding of the target company.

Change in ownership before and after acquisition

(1) Number of shares already acquired 0 shares
Percentage of voting rights: 0%
(2) Number of shares to be acquired 194,389,661 shares*
Percentage of voting rights: 100% (planned)
* Total shares outstanding

Schedule

(1) Board meeting resolution January 6, 2017
(2) Signing date January 8, 2017
(3) Commencement date and settlement date of the tender offer From January, 2017 to February, 2017
**The initial period of the tender offer will commence within 10 business days following execution of the merger agreement with ARIAD [January 8, 2017 (U.S.)], and will close 20 business days after commencement. If the conditions of the tender offer are not satisfied, the period of the tender offer will be extended, but the extension period will not exceed May 2017 (or August 2017 if antitrust clearance not received).
(4) Completion of acquisition By the end of February, 2017 (planned)*
* Fulfillment of the terms and conditions of the U.S. Antitrust Law and the satisfaction of certain other customary conditions are required to complete the acquisition.

Outlook

FY2016

At this stage we expect minimal impact on Underlying Revenue and Underlying Core Earnings. We do expect to incur transition and integration expenses, however, these expenses are not material to the current year result. We will incorporate the financial impact in our FY2016 consolidated earnings forecast and announce at the third quarter earnings conference in February 2017.

FY2017 and beyond

It is expected that the acquisition of ARIAD will be accretive to Takeda’s Underlying Core Earnings by FY2018 and broadly neutral in FY2017. Strong revenue growth and synergy savings will offset increased sales and marketing costs for the brigatinib launch. Takeda’s financial guidance, including EPS, for FY2017 will be announced when Takeda reports earnings for FY2016 in May 2017.

On January 9, 2017 Atreca, Inc., a biotechnology company focused on developing novel therapeutics based on a deep understanding of the human immune response, reported the scheduled presentation of positive preclinical findings generated via the Company’s Immune Repertoire Capture (IRC) technology (Press release, Atreca, JAN 9, 2017, View Source [SID1234522957]). The findings will be presented at the 16th Annual PepTalk: The Protein Science Week Conference, taking place at the Hilton San Diego Bayfront, January 9-13, 2017. The presentation, entitled "Natively Paired B- and T-Cell Immune Repertoires and the Discovery of Potent Antibody Therapeutics," will be delivered by Atreca research scientist Sean Carroll, Ph.D., on Thursday, January 12, at 2:35 p.m. Pacific Time.

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N. Michael Greenberg, Ph.D., Atreca’s Chief Scientific Officer and Senior Vice President, stated, "We are proud of the high quality and productivity of our proprietary platform that profiles active anti-tumor immune responses driving positive outcomes in cancer patients undergoing treatment. It is because of the unique features and capabilities of our platform that we are discovering and developing these nextgeneration antibody-based immunotherapies to deliver differentiated combination treatments across a potentially wide range of indications. We look forward to bringing our programs to IND-enabling studies and clinical testing."

Atreca’s IRC technology reveals natively paired and complete variable regions of immunoglobulins expressed by specifically selected B- and T-cells. Using IRC, Atreca has generated repertoires from active immune responses of many patients across multiple indications as well as from target-immunized mice. Analyses of these essentially unbiased and error-free repertoires have yielded immunologic insights as well as potent antibodies targeting tumors, infectious disease antigens, and autoimmune epitopes.

On January 8, 2017 Merrimack Pharmaceuticals, Inc. (NASDAQ: MACK) ("Merrimack" or the "Company") reported that it has entered into a definitive asset purchase and sale agreement with Ipsen (Euronext: IPN; ADR: IPSEY) for a transaction valued at up to $1.025 billion, plus up to $33 million in net milestone payments retained by Merrimack pursuant to Merrimack’s exclusive licensing agreement with Shire, under which Merrimack will (Press release, Merrimack, JAN 8, 2017, View Source [SID1234517338]).

• Sell to Ipsen its first commercial product ONIVYDE, including U.S. commercialization rights and its licensing agreement with Shire plc; and

• Sell to Ipsen its generic version of doxorubicin hydrochloride (HCI) liposome injection ("generic DOXIL") marketed in the United States as DOXIL and advanced under a development, license and supply agreement with Actavis LLC.
The transaction, which is expected to be completed in the first quarter of 2017, is subject to certain customary closing conditions, including Merrimack stockholder approval and certain governmental regulatory clearances.
Merrimack also reported the completion of its previously announced strategic pipeline review resulting in the identification of the three most promising clinical programs to focus its development efforts on going forward. In assessing the clinical and financial prioritization of its programs, Merrimack determined that MM-121, MM-141 and MM-310 are the programs with the highest probability of success and the highest return on investment. The Company believes focusing on these programs is in the best interests of Merrimack, its stockholders and cancer patients worldwide.
As a result of the transaction, the refocused pipeline and the previously implemented restructuring initiatives announced in October 2016, Merrimack will have a significantly reduced operating expense structure and a capital structure that is appropriately aligned with the Company’s new focus. Upon completing the Ipsen transaction and refocusing effort, the Company will have approximately 80 employees; this represents a reduction of 80% from approximately 400 employees prior to implementing the restructuring in October 2016.
Terms of the Transaction & Use of Proceeds
Under the terms of the agreement, which has been unanimously approved by the Merrimack Board of Directors, Merrimack will receive from Ipsen: $575 million in cash at closing; and up to $450 million in additional regulatory approval-based milestone payments. Merrimack will also retain the rights to receive net milestone payments pursuant to Merrimack’s exclusive licensing agreement with Shire for the ex-U.S. development and commercialization of ONIVYDE for up to $33 million. The $33 million of net milestone payments includes payments related to ONIVYDE of $18 million from the sale1 of ONIVYDE in two
additional major European countries, $5 million related to the sale1 of ONIVYDE in the first major non-European, non-Asian country and $10 million for the first patient dosed in the planned small cell lung cancer (SCLC) trial. The Company believes these near-term payments are highly probable based on current data and expects they will be received in 2017.
Merrimack intends to use the $575 million upfront payment, net of tax reserves and transaction-related and other costs, to:

• Invest $125 million to develop the Company’s streamlined oncology pipeline, such that Merrimack will be able to fund itself into the second half of 2019;

• Extinguish the $175 million in outstanding Senior Secured Notes due in 2022, plus approximately $20 million of costs associated with the redemption, such that in addition to a significantly reduced operating expense structure, the Company’s capital structure will be appropriate for a development stage biopharmaceutical company; and

• Return at least $200 million to the Company’s stockholders through a special cash dividend, which equates to approximately $1.54 per outstanding share of common stock, based on the number of Merrimack outstanding shares today. The Board of Directors plans to approve the special cash dividend after the closing of the transaction, and Merrimack expects it will be paid soon thereafter. The Company will announce a record date and ex-dividend date in due course.
Merrimack will also return to the Company’s stockholders 100% of the amounts received of the up to $450 million in additional regulatory approval-based milestone payments for additional indications for ONIVYDE in the U.S., net of taxes owed related to the receipt of these milestones. Prior to any tax impact, gross proceeds for achieving these milestones equates to approximately $3.46 per outstanding share of common stock, based on the number of Merrimack outstanding shares today. The milestones are composed of: $225 million for U.S. Food and Drug Administration ("FDA") approval in first-line pancreatic cancer, $150 million for FDA approval in small cell lung cancer and $75 million for FDA approval in any third indication.
Management’s Comments
"The agreement to sell ONIVYDE and generic DOXIL, and our decision to focus on MM-121, MM-141 and MM-310, conclude a comprehensive process that our Board conducted to maximize value for stockholders and confirms the strength of our technology and the power of systems biology," said Gary Crocker, Chairman of Merrimack’s Board of Directors and interim President and CEO. "With this transformative step, Merrimack is moving forward as a more focused research and development company targeting three clinical stage assets with outstanding value potential. The transaction proceeds will allow Merrimack to realign its capital structure and fund the pipeline into the second half of 2019, as well as return cash to stockholders in the form of the special dividend. This strategic transaction also enhances stockholder value by providing sufficient, non-dilutive capital to fund our new, strongly-focused clinical objectives for MM-121, MM-141 and MM-310, and to participate in the potential upside of expected value-inflection points from each targeted program. We are confident that the actions we are taking are the best way to deliver innovative oncology treatments for cancer patients, while creating value for stockholders."
"Through the transaction announced today, we are streamlining our operating structure to significantly reduce operating expense, while bolstering our capital structure through an infusion of cash and the extinguishment of the Senior Secured Notes," said Dr. Yasir Al-Wakeel, CFO and Head of Corporate Development of Merrimack. "Going forward, we will have a more focused capital allocation program dedicated to advancing MM-121, MM-141 and MM-310. With the multi-year cash runway provided by this transaction, Merrimack will have ample resources to fund its development programs into the second half of 2019, by which time we expect to have additional data regarding the viability of MM-121, MM-141 and MM-310."
Pipeline Focused on MM-121, MM-141 and MM-310
As part of the Company’s strategic shift toward research and development, Merrimack will focus on developing innovative and promising anti-cancer agents through clinical proof-of-concept (PoC). Going
forward Merrimack is dedicated to accelerating the time to clinically meaningful data in precisely defined patient populations, while optimizing the use of available resources. The Merrimack Board determined that MM-121, MM-141 and MM-310 represent the best opportunities to optimize and extract value for stockholders and cancer patients worldwide:

• MM-121 (seribantumab) is a first in class fully human monoclonal antibody that binds to the HER3 receptor and targets HRG+ cancers. Merrimack is currently conducting the SHERLOC study, evaluating MM-121 in HRG+ non-small cell lung cancer patients in combination with docetaxel or pemetrexed. The primary endpoint of the ongoing SHERLOC study is overall survival and it is planned to enroll 280 patients. Given the new strategic direction of Merrimack to develop its pipeline candidates through PoC, Merrimack will modify the ongoing SHERLOC study to a smaller Phase 2 study with progression free survival as the primary endpoint, targeting top-line results by year-end 2018. Likewise, following completion of the transaction, Merrimack intends to initiate an additional Phase 2 trial to demonstrate MM-121’s effectiveness in advanced HER2 negative, ER+/PR+ and HRG+ breast cancer.

• MM-141 (istiratumab) is a bispecific tetravalent antibody and a potent inhibitor of the PI3K/AKT/mTOR pathway by targeting IGF1-R and HER3. Currently, Merrimack is conducting the CARRIE study, a Phase 2 trial evaluating MM-141 in metastatic pancreatic cancer patients with high levels of free IGF1 in combination with nab-paclitaxel and gemcitabine in the front-line setting. The ongoing CARRIE study planned to enroll 140 patients and to evaluate the activity of MM-141 in both the free IGF high and the free IGF1 high and HRG+ patient population. Given that the prevalence of both biomarkers is greater than 50%, the Company is confident that it can modify the ongoing CARRIE study to more rapidly obtain clinically meaningful data. This modified CARRIE study will target to enroll 80 patients and Merrimack estimates top-line data to be reported in the first half of 2018.

• MM-310 is expected to begin a first in human Phase 1 study to evaluate its safety and efficacy in the first quarter of 2017. MM-310 is an antibody directed nanotherapeutic (ADN) that contains a prodrug of docetaxel and targets the EphA2 receptor, which is highly-expressed in most solid tumor types. MM-310 was designed to improve the therapeutic window of docetaxel in major indications such as prostate, ovarian, bladder, gastric and lung cancers. MM-310 utilizes the same proprietary nano-liposomal technology as ONIVYDE, facilitating the antibody-targeted delivery of the chemotherapeutic agent docetaxel.
With the demonstration of clinical value, Merrimack will seek partners at the appropriate time to complete the development, registration and commercialization of MM-121, MM-141 and MM-310.
Other Pipeline Molecules
Other molecules in the Company’s pipeline remain valuable and will be put on hold until such time as Merrimack determines conditions are appropriate to invest in them. In connection with the conclusion of the pipeline review, Merrimack has decided to:

• Discontinue the Phase 1 clinical study of MM-151, an oligoclonal therapeutic consisting of a mixture of three fully human monoclonal antibodies, in patients with solid tumors and in colorectal cancer in combination with ONIVYDE. Merrimack remains optimistic about the clinical value of MM-151 and will actively seek partners or outside financing to take over development;

• Defer continued investment in MM-131, MM-302 and several preclinical programs until partnering opportunities or other funding sources are identified; and

• Focus early stage discovery efforts.
Advisers
BofA Merrill Lynch and Credit Suisse Securities (USA) LLC are serving as financial advisers to Merrimack and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal adviser.

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On January 9, 2017 CTI BioPharma Corp. (CTI BioPharma) (NASDAQ and MTA: CTIC) reported positive progress on its lead programs in addition to key business priorities for 2017 (Press release, CTI BioPharma, JAN 8, 2017, View Source;p=RssLanding&cat=news&id=2234839 [SID1234517386]).

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"Throughout 2016 we maintained our commitment to bringing new therapies to patients with unmet medical needs, and were successful in working with the FDA to remove the full clinical hold on pacritinib and get it back on the development track for the benefit of myelofibrosis patients," said Richard Love, Interim President and Chief Executive Officer of CTI BioPharma. "The PERSIST-2 clinical trial of pacritinib was highlighted as one of six late-breaking data presentations at the American Society of Hematology (ASH) (Free ASH Whitepaper) conference in December. We believe this oral presentation was well received by the hematology/oncology community, which recognizes the unmet need for myelofibrosis patients who are ineligible to receive or are not benefitting from the approved JAK1/JAK2 inhibitor, ruxolitinib. Additionally, the PIX306 confirmatory trial of our commercial product PIXUVRI(R)(pixantrone) continues to progress toward an announcement of top-line results later this year. If positive, this trial could provide the opportunity for full approval and label expansion by EMA, and discussions with the FDA about accelerated PIXUVRI approval in the US for the treatment of patients with relapsed or refractory aggressive B-cell non-Hodgkin lymphoma. We have also made significant effort at reducing our expenses and believe we are well positioned moving into 2017."

Recent Progress Update

Pacritinib

In January 2017, CTI BioPharma announced the U.S. Food and Drug Administration (FDA) removed the full clinical hold on studies being conducted under the Investigational New Drug (IND) application for pacritinib.

In December 2016, data from the randomized Phase 3 PERSIST-2 clinical trial comparing pacritinib with physician-specified best available therapy (BAT), including ruxolitinib, for treatment of patients with myelofibrosis whose baseline platelet counts are less than 100,000 per microliter was one of six late-breaking oral presentations at the American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting. Patients in the trial were randomized to receive 200 mg pacritinib twice daily (BID), 400 mg pacritinib once daily (QD), or BAT. In those patients who had a chance to reach Week 24 (the primary analysis time point) at the time the clinical hold was imposed, the trial showed a statistically significant response rate in spleen volume reduction (SVR) in patients treated with pacritinib compared to BAT irrespective of prior treatment with ruxolitinib. The co-primary endpoint of reduction of Total Symptom Score (TSS) was not achieved but trended toward improvement in TSS. Although secondary objectives could not be evaluated formally due to the study not achieving one of the primary objectives, when the two pacritinib dosing arms were evaluated separately versus BAT, pacritinib BID showed a higher percent of SVR and TSS responses compared to BAT; whereas, pacritinib given QD showed only a higher percent SVR responses compared to BAT. There was no significant difference in overall survival (OS) across treatment arms, censored at the time of clinical hold. The most common treatment-emergent adverse events (AEs), occurring in 20 percent or more of patients treated with pacritinib within 24 weeks, of any grade, were gastrointestinal (generally manageable diarrhea, nausea and vomiting) and hematologic (anemia and thrombocytopenia) and were generally less frequent for BID versus QD administration. The most common serious treatment-emergent AEs (incidence of ≥5 percent reported in any treatment arm irrespective of grade) were anemia, thrombocytopenia, pneumonia and acute renal failure none of which exceeded 8 percent individually in any arm. The presentation was also selected to be part of the "2017 Highlights of ASH (Free ASH Whitepaper)" program designed to review significant scientific updates presented at ASH (Free ASH Whitepaper) with hematologists/oncologists at five locations across the U.S.

PIXUVRI

In January 2017, CTI BioPharma received a €7.5 million milestone payment from its partner Servier following achievement of a milestone associated with patient enrollment in the Phase 3 PIX306 clinical trial of PIXUVRI. The trial is a post-authorization trial as part of the conditional marketing authorization of PIXUVRI in the European Union (E.U.) The PIX306 is comparing PIXUVRI and rituximab with gemcitabine and rituximab in the setting of aggressive B-cell non-Hodgkin lymphoma (NHL). The trial continues to enroll patients.

2017 Key Objectives

Advance Marketing Authorization Application in E.U. and define regulatory pathway in U.S. for pacritinib. CTI BioPharma continues to have dialogue with the European Medicines Authority (EMA) on the Marketing Authorization Application (MAA) for pacritinib that had been previously filed by its former partner, Baxalta. At the time of the filing only data from the first Phase 3 clinical trial of pacritinib, PERSIST-1, was available. With the availability of results from the PERSIST-2 clinical trial and the recent completion of the PERSIST-2 clinical study report, CTI BioPharma believes that the best strategy currently to achieve marketing authorization is to utilize the combined clinical evidence from both Phase 3 trials. Accordingly, CTI BioPharma is evaluating whether to update the current application with the additional data from PERSIST-2 or to resubmit the MAA. Under either plan, CTI BioPharma would expect to pursue marketing authorization for the treatment of patients with myelofibrosis who are ineligible to receive, intolerant of or have insufficient response to the approved JAK1/JAK2 inhibitor, ruxolitinib.

CTI BioPharma also intends to discuss with the FDA the future development of pacritinib.

Initiate PAC203 trial. CTI BioPharma expects to initiate the PAC203 trial in the second quarter of 2017. The trial plans to enroll up to approximately 105 patients with primary myelofibrosis who have failed prior ruxolitinib therapy to evaluate the safety and the dose response relationship for efficacy (spleen volume reduction at 24 weeks) of three dose regimens: 100 mg once-daily, 100 mg twice-daily (BID) and 200 mg BID.

Secure ex-U.S. partner for pacritinib. CTI BioPharma intends to secure a partnership for the development and commercialization of pacritinib in certain territories outside the U.S.

Release top-line results of PIX306. CTI BioPharma expects to complete enrollment in the ongoing PIX306 trial of PIXUVRI and release top-line results by the end of 2017.

Financial

CTI BioPharma’s preliminary, unaudited estimates of its cash and cash equivalents balance as of December 31, 2016 is approximately $44.0 million. In January 2017, we received a €7.5 million milestone payment from Servier. CTI BioPharma expects that its cash burn (a non-GAAP financial measure), excluding cash inflows from future business development activities and proceeds from capital markets financing activities, would be approximately $65-75 million for 2017. The Company expects to meet its cash requirements for 2017 with existing cash and by partnering one or more product assets during the course of the year.

About Pacritinib

Pacritinib is an investigational oral kinase inhibitor with specificity for JAK2, FLT3, IRAK1 and CSF1R. The JAK family of enzymes is a central component in signal transduction pathways, which are critical to normal blood cell growth and development, as well as inflammatory cytokine expression and immune responses. Mutations in these kinases have been shown to be directly related to the development of a variety of blood-related cancers, including myeloproliferative neoplasms, leukemia and lymphoma. In addition to myelofibrosis, the kinase profile of pacritinib suggests its potential therapeutic utility in conditions such as acute myeloid leukemia, or AML, myelodysplastic syndrome, or MDS, chronic myelomonocytic leukemia, or CMML, and chronic lymphocytic leukemia, or CLL, due to its inhibition of c-fms, IRAK1, JAK2 and FLT3.

In August 2014, pacritinib was granted Fast Track designation by the FDA for the treatment of intermediate and high risk myelofibrosis including, but not limited to, patients with disease-related thrombocytopenia (low platelet counts); patients experiencing treatment-emergent thrombocytopenia on other JAK2 inhibitor therapy; or patients who are intolerant of, or whose symptoms are not well controlled (sub-optimally managed) on other JAK2 therapy.

Pacritinib was evaluated in two Phase 3 clinical trials, known as the PERSIST program, for patients with myelofibrosis, with one trial in a broad set of patients without limitations on platelet counts, the PERSIST-1 trial; and the other in patients with low platelet counts, the PERSIST-2 trial. The PERSIST-1 trial met its primary endpoint of spleen volume reduction (35 percent or greater from baseline to Week 24 by MRI/CT scan). The PERSIST-2 trial met one of its co-primary endpoints, that of spleen volume reduction. The co-primary endpoint of reduction of Total Symptom Score (TSS) was not achieved but trended toward improvement in TSS.

Clinical studies under the investigational new drug (IND) for pacritinib were subject to a full clinical hold issued by the FDA in February 2016. In January 2017, the FDA removed the full clinical hold and stated that clinical trials may be resumed.

About PIXUVRI (pixantrone)

PIXUVRI is a novel aza-anthracenedione with unique structural and physiochemical properties. In May 2012, the European Commission granted conditional marketing authorization for PIXUVRI as a monotherapy for the treatment of adult patients with multiply relapsed or refractory B-cell aggressive NHL. The benefit of PIXUVRI treatment has not been established in patients when used as fifth line or greater chemotherapy in patients who are refractory to last therapy. The Summary of Product Characteristics (SmPC) has the full prescribing information, including the safety and efficacy profile of PIXUVRI in the approved indication. The SmPC is available at www.pixuvri.eu. PIXUVRI does not have marketing approval in the United States.

In September 2014, CTI BioPharma entered into an exclusive license and collaboration agreement, with Servier with respect to the development and commercialization of PIXUVRI. Under the agreement, CTI BioPharma retains full commercialization rights to PIXUVRI in Austria, Denmark, Finland, Germany, Israel, Norway, Sweden, Turkey, the United Kingdom and the U.S. while Servier has exclusive rights to commercialize PIXUVRI in all other countries.