Cell Thera sells Zevalin to partner Spectrum

In what is seen by observers as a bid to keep the company financially afloat, Cell Therapeutics says that it exercised its option to sell its  50% ownership interest in the Zevalin (ibritumomab tiuxetan) joint  venture to fellow USA-based partner Spectrum Pharmaceuticals for $18.0  million. The two firms established a JV late last year to develop and  commercialize Zevalin (Marketletter December 22, 2008). At that time,  CT contributed all of the Zevalin-related assets to the venture and sold  to Spectrum a 50% membership interest for $15.0 million, plus certain  milestone payments.

As a result of pulling out of the deal, the Seattle-based company will  focus its resources on gaining approval of pixantrone for relapsed  aggressive non-Hodgkin's lymphoma and Opaxio, a polyglutamate  paclitaxel drug candidate for the potential treatment of non-small cell  lung and ovarian cancer (formerly known as Xyotax). CT estimates that,  as a result of the sale of the Zevalin interest, it will reduce expenses  by about $15.0 million annually from activities previously associated  with the compound while providing it with a non-dilutive source of  operating capital.

At the closing of the sale, CT will receive $6.0 million, with the rest  of the $18.0 million to be paid within 90 days of that date. The  completion of the deal is contingent upon the satisfaction of certain  closing conditions, including the delivery of a legal opinion from  counsel to CT. The news, on February 20, saw CT's share price leap 21.5%  to $0.06, while Spectrum advanced a somewhat more modest 3.1% to $1.65.