On January 9, 2017 Infinity Pharmaceuticals, Inc. (NASDAQ: INFI) reported anticipated milestones for IPI-549, a potentially first-in-class immuno-oncology product candidate that selectively inhibits PI3K-gamma, and provided financial guidance for 2017 (Press release, Infinity Pharmaceuticals, JAN 9, 2017, View Source;p=RssLanding&cat=news&id=2234986 [SID1234517387]). During the year, Infinity expects to make substantial progress with the Phase 1 clinical study of IPI-549, which is designed to evaluate IPI-549 both as a monotherapy and in combination with Opdivo, a PD-1 immune checkpoint inhibitor. In 2017, the company also plans to report updated Phase 1 clinical data from the monotherapy dose-escalation as well as initial clinical data from the combination dose-escalation phase. Additionally, Infinity expects to complete the monotherapy and combination dose-escalation phases of the study and initiate monotherapy and combination expansion cohorts this year. The company also announced today that it has completed patient enrollment in the first dose-escalation cohort evaluating IPI-549 plus Opdivo. These updates were made in conjunction with the 35th Annual J.P. Morgan Healthcare Conference that begins today in San Francisco. Infinity’s chief executive officer, Adelene Perkins, will discuss the company’s continued execution on its corporate strategy and 2017 priorities as part of a live presentation on Thursday, January 12, at 10:30 a.m. PT (1:30 p.m. ET). The presentation will be webcast on Infinity’s website, www.infi.com.

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"We enter 2017 intensely focused on advancing IPI-549 and, having already fully enrolled the first dose-escalation cohort evaluating IPI-549 plus Opdivo, we are off to a strong start to the year. Preclinical data in two recent Nature publications provide a compelling rationale for advancing IPI-549 and show that IPI-549 in combination with immune checkpoint inhibitors may overcome resistance to checkpoint blockade," stated Adelene Perkins, Infinity’s chief executive officer. "IPI-549 represents a unique approach to targeting tumors through its effects on the tumor microenvironment, and we look forward to presenting updated monotherapy and initial combination data from our Phase 1 study this year."

The tumor microenvironment, or TME, refers to the non-cancerous cells present in the tumor. Cells within the TME, including immune-suppressive myeloid cells, can provide growth signals to tumor cells, as well as signals that inhibit an anti-tumor immune response. The presence of the supportive TME is believed to be one reason why some cancer therapies do not provide durable or effective results. Targeting the immune-suppressive myeloid cells represents an emerging approach within the field of cancer immunotherapy, and inhibition of PI3K-gamma represents a novel approach to targeting the immune-suppressive microenvironment. Preclinical data recently published in Nature suggest that IPI-549 may enhance the effects of checkpoint inhibitors and may also reverse tumor resistance to checkpoint inhibitors by targeting immune cells and altering the immune-suppressive microenvironment, promoting an anti-tumor immune response.1,2

Today Infinity also announced that on Friday, January 20, 2017, preclinical and initial clinical data from the Phase 1 study of IPI-549 will be presented at the Keystone Symposia Conference, ‘PI3K Pathways in Immunology, Growth Disorders and Cancer.’ Jeffery Kutok, M.D., Ph.D., vice president of biology and translational science at Infinity, will give the presentation, entitled "The PI3K-gamma inhibitor, IPI-549, increases antitumor immunity by targeting tumor-associated myeloid cells and overcomes immune checkpoint blockade resistance in preclinical tumor models."

"With IPI-549, we have a tremendous opportunity to potentially further improve response rates and survival for patients by overcoming resistance to immune checkpoint inhibitors," said Lawrence Bloch, M.D., J.D., president of Infinity. "We have an experienced and right-sized team that is well-resourced and fully focused on maximizing the value of IPI-549, with a cash runway into the first quarter of 2019."

2017 Program Goals for IPI-549
Infinity expects to achieve the following duvelisib milestones in 2017:

Present preclinical and clinical data from Phase 1 study at the upcoming PI3K Keystone Symposia Conference in January 2017
Report Phase 1 data from the monotherapy dose-escalation phase as well as the IPI-549 plus Opdivo dose-escalation phase in 2017
Complete the dose-escalation phase evaluating IPI-549 monotherapy in the first half of 2017
Begin enrolling patients with advanced solid tumors in the monotherapy expansion cohort during the second half of 2017
Complete the dose-escalation combination phase evaluating IPI-549 plus Opdivo in the second half of 2017
Begin enrolling patients with non-small cell lung cancer (NSCLC), melanoma and squamous cell carcinoma of the head and neck (SCCHN) in combination expansion cohorts evaluating IPI-549 plus Opdivo in the second half of 2017
Cash and Investments Outlook
Infinity ended 2016 with approximately $92.1 million in cash and investments (unaudited) and plans to report its fourth quarter and full-year 2016 financial results in March. The company is providing the following financial guidance today:

Net loss: Infinity expects net loss for 2017 to range from $40 million to $50 million.
Cash and Investments: Infinity expects to end 2017 with a year-end cash and investments balance ranging from $40 million to $50 million.
Based on its current operational plans, Infinity expects that its existing cash, cash equivalents and available-for-sale securities at December 31, 2016, will be adequate to satisfy the company’s capital needs into the first quarter of 2019.
The company’s financial outlook excludes additional funding or business development activities and includes expenses related to duvelisib beyond November 1, 2016, capped at $4.5 million, as well as costs related to Infinity’s 2016 restructuring. Additionally, Infinity’s updated cash runway expectation assumes receiving a $6.0 million milestone payment from Verastem for positive DUO study results.

IPI-549 Phase 1 Study Details
The ongoing Phase 1 clinical study of IPI-549 is designed to explore the activity, safety, tolerability, pharmacokinetics and pharmacodynamics of IPI-549 as a monotherapy and in combination with Opdivo in patients with advanced solid tumors. The study includes monotherapy and combination dose-escalation phases, in addition to expansion cohorts, and is expected to enroll approximately 175 patients.

The IPI-549 monotherapy dose-escalation phase is expected to be completed in the first half of 2017, and the monotherapy expansion phase in patients with advanced solid tumors is anticipated to begin in the second half of the year. Once the dose-escalation phase evaluating IPI-549 plus Opdivo is completed, an expansion phase is planned to evaluate the combination in patients with select solid tumors, including NSCLC, melanoma and SCCHN. Patients enrolled in expansion cohorts evaluating IPI-549 plus Opdivo represent a difficult-to-treat population, as they must have demonstrated de novo or acquired resistance to an immediately prior therapy of an inhibitor of PD-1 or PD-L1.

Although there has been great progress in the treatment of cancer, there remains a need for additional treatment options. NSCLC, melanoma and SCCHN, which will comprise three of the expansion cohorts in this Phase 1 study, account for more than 17 percent of all new cancer cases in the U.S.3,4

About IPI-549
IPI-549 is an investigational, orally administered immuno-oncology development candidate that selectively inhibits PI3K-gamma. In preclinical studies, IPI-549 increases antitumor immunity by targeting tumor-associated myeloid cells and overcomes immune checkpoint blockade resistance in preclinical tumor models. As such, IPI-549 may have the potential to treat a broad range of solid tumors and represents a potentially complementary approach to restoring anti-tumor immunity in combination with other immunotherapies such as checkpoint inhibitors. A Phase 1 study of IPI-549 in patients with advanced solid tumors is ongoing.5

IPI-549 is an investigational compound, and its safety and efficacy have not been evaluated by the U.S. Food and Drug Administration or any other health authority.

On January 9, 2017 Celyad (Euronext Brussels and Paris, and NASDAQ: CYAD), a leader in the discovery and development of engineered cell-based therapies, reported that the U.S. Patent and Trade Office (USPTO) has decided to uphold Celyad’s U.S. Patent No. 9,181,527, relating to allogeneic human primary T-cells that are engineered to be TCR-deficient and express a CAR (Press release, Celyad, JAN 9, 2017, View Source [SID1234517409]).

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"We are pleased with the outcome of this re-examination of our patent related to the production of allogeneic TCR-deficient CAR-T cells. This marks the third decision by the USPTO to uphold this patent, which thus remains valid and enforceable, and provides for continued intellectual property protection for this valuable asset", said Philippe Dechamps, Chief Legal Officer of Celyad.

"Allogeneic CAR T-cells are a promising avenue to broaden the scope of application of cell based immunotherapy", said Georges Rawadi, VP Business Development and IP of Celyad. "We look forward to the further development of our own allogeneic programs and also continue to offer other parties access to this important patent to advance the field more broadly."

Celyad’s U.S. patent (No. 9,181,527), and more precisely claim 1 of the said patent, was challenged by an anonymous third party through an Ex Parte Re-examination procedure. The request for Ex Parte re-examination was filed on February 10th, 2016 and an order granting Ex Parte Re-examination of claim 1 was issued by the USPTO on March 24th, 2016. The final decision of this Ex Parte procedure that was issued on January 6th 2017 is not subject to appeal and upholds the validity of the patent.

Therefore, Celyad’s U.S. patent (No. 9,181,527), confirms continued coverage of CAR-expressing human T-cells, according to Claim 1, modified to reduce or eliminate T-cell receptor expression or function.

On January 8, 2017 Ipsen (Euronext: IPN; ADR: IPSEY) reported that it has entered into a definitive agreement to acquire global oncology assets from Merrimack Pharmaceuticals (NASDAQ: MACK), including its key marketed product ONIVYDE (irinotecan liposome injection) for the treatment of patients with metastatic adenocarcinoma of the pancreas after disease progression following gemcitabine-based therapy, in combination with fluorouracil and leucovorin (Press release, Ipsen, JAN 8, 2017, View Source [SID1234517358]). Under the terms of the agreement, Ipsen will gain exclusive commercialization rights for the current and potential future ONIVYDE indications in the U.S., as well as the current licensing agreements with Shire for commercialization rights ex-U.S. and PharmaEngine for Taiwan. The transaction also includes Merrimack’s commercial and manufacturing infrastructure, and generic doxorubicin HCl liposome injection.

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The transaction represents a unique opportunity and a strong strategic fit for Ipsen. ONIVYDE is a clinically differentiated and FDA-approved product for patients with high unmet medical needs. The transaction secures a marketed, wholly-owned asset with current U.S. revenues and significant revenue growth projections, based on solid clinical data and potential approvals in additional indications already in clinical development. Furthermore, there are significant commercial synergies to be realized by integrating the ONIVYDE franchise with the existing Ipsen U.S. oncology commercial infrastructure, which has strong expertise and a proven track record with Somatuline. As a result, this transaction strengthens Ipsen’s Oncology franchise and accelerates both its near- and long-term growth trajectory and profitability.

David Meek, CEO of Ipsen, commented, "The acquisition of ONIVYDE represents a compelling strategic opportunity to further strengthen Ipsen’s oncology portfolio while leveraging our U.S. infrastructure and creating meaningful potential incremental growth and profitability. Pancreatic cancer is now the third leading cause of cancer-related deaths. It is an area that has had many drug failures and very few FDA approvals over the past two decades. For the tens of thousands of patients living with pancreatic cancer in the U.S. who have received prior treatment with gemcitabine, ONIVYDE represents an important, differentiated innovation, given its proven overall survival benefit in an area of high unmet medical need with few approved therapies."

"ONIVYDE is a landmark, recently approved therapeutic option for metastatic pancreatic cancer. Since the launch in the fourth quarter of 2015, many patients have already benefitted from ONIVYDE." said Cynthia Schwalm, Executive Vice President, North America Commercial Operations, Ipsen. "Based on our track record of successfully bringing oncology products to patients, we are confident in our ability to leverage our operational and clinical development capabilities, and experienced commercial and medical affairs teams to ensure eligible patients have access to ONIVYDE in the U.S."

Ipsen will be responsible for advancing the ongoing ONIVYDE clinical development program, which includes a Phase 2 trial in first-line previously untreated metastatic pancreatic cancer, a Phase 2/3 trial in relapsed small-cell lung cancer, and a Phase 1 pilot trial in breast cancer.

Under the terms of the agreement, Ipsen will pay $575 million cash at closing plus up to $450 million upon the approval of potential additional indications for ONIVYDE in the U.S. The transaction will be fully financed by Ipsen’s existing cash and lines of credit. The deal should be dilutive in 2017 and accretive from 2018 onwards both in operating margin and EPS. The transaction, which is subject to customary closing conditions, including governmental regulatory clearances, and a vote by Merrimack shareholders, is expected to close by the end of the first quarter of 2017.

Ipsen was advised on this transaction by MTS Health Partners, LP and Dechert LLP.

About Pancreatic Cancer

Pancreatic cancer is a rare and deadly disease with approximately 338,000 new patients diagnosed globally each year, approximately 50,000 of which are in the United States2. More than half are diagnosed with metastatic disease who have an overall 5-year survival rate of two percent2, and often rapidly progress during or shortly after receiving chemotherapy3. Pancreatic cancer is the 3rd leading cause of cancer-related death in the United States surpassing breast cancer.2 It is expected to become the 2nd leading cause of cancer-related death in the US by the year 2030, surpassing colorectal cancer.2

About ONIVYDE

ONIVYDE is a unique encapsulation formulation of irinotecan in a long-circulating liposomal form designed to increase the length of tumor exposure to irinotecan and its active metabolite SN-38.

In the pivotal Phase 3 NAPOLI-1 study, ONIVYDE with fluorouracil and folinic acid demonstrated a statistically significant improvement of overall survival in adult patients with metastatic adenocarcinoma of the pancreas who have progressed following gemcitabine-based therapy3. Gemcitabine, both as monotherapy as well as in combination, is commonly used in the first-line treatment of locally advanced and/or metastatic pancreatic adenocarcinoma, as well as in the adjuvant (treatment after surgery) and neo-adjuvant (treatment before surgery) settings4.

Ipsen will market the product in the United States where ONIVYDE received US Food and Drug Administration (FDA) approval in October 2015 in combination with fluorouracil and leucovorin for the treatment of patients with metastatic adenocarcinoma of the pancreas who have progressed following treatment with gemcitabine-based therapy.

Shire is responsible for the development and commercialization of ONIVYDE outside of the United States and Taiwan under an exclusive licensing agreement with Merrimack Pharmaceuticals, Inc. In October 2016, the European Commission (EC) granted Marketing Authorization of ONIVYDE for the treatment of metastatic adenocarcinoma of the pancreas, in combination with 5-fluorouracil (5-FU) and leucovorin (LV), in adult patients who have progressed following gemcitabine-based therapy.

The ONIVYDE product license was granted to PharmaEngine in March 2016 for commercialization rights in Taiwan.

Licenses outside the U.S. will be transferred to Ipsen.

About Generic Doxorubicin HCl Liposome Injection

Generic doxorubicin HCl Liposome Injection is currently being evaluated by the U.S. Food and Drug Administration (FDA) for the potential treatment of ovarian cancer, multiple myeloma and Kaposi’s sarcoma. Teva retains the worldwide commercial rights for this product, and Ipsen will be eligible to receive milestones and shared profits from potential sales.

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.