MEI Pharma to acquire S*BIO's pracinostat

US cancer drug developer MEI Pharma (Nasdaq: MEIP) has entered into a definitive asset purchase agreement with Singapore’s privately-held biotech firm S*BIO Pte to acquire the latter’s exclusive worldwide rights to pracinostat, an investigational, potential best-in-class, oral histone deacetylase (HDAC) inhibitor.

Under the terms of the deal, MEI Pharma will issue $500,000 of common stock to S*BIO. The agreement also includes potential success-based clinical, regulatory and sales milestone payments of up to $75.2 million, as well as low single-digit contingent earn-out payments based on net sales. The transaction is expected to close on or about August 28, 2012, subject to S*BIO shareholder approval and certain customary closing conditions.

"We are excited to seize this opportunity to bolster our pipeline with a potential best-in-class, late-stage compound with activity against a validated target, under favorable terms," said Daniel Gold, president and chief executive of MEI Pharma, adding: "The acquisition of pracinostat broadens our potential addressable market in oncology with applications in both hematologic disorders and solid tumors. We believe that the addition of this targeted small molecule to our existing portfolio of novel isoflavone-based drug candidates, ME-143 and ME-344, will significantly enhance shareholder value."