Cell Thera buys rights to Chroma's cancer drug candidate tosedostat

Seattle, USA-based Cell Therapeutics (Nasdaq: CTIC) and UK cancer drug discovery and development firm Chroma Therapeutics have entered into a co-development and license agreement providing CTI with exclusive marketing and co-development rights to privately-held Chroma's cancer drug candidate tosedostat in North, Central and South America.

Under the terms of the deal, CTI will make an upfront payment of $5 million and a milestone of $5 million when the acute myeloid leukemia (AML) pivotal trial is initiated, which is expected to occur in the fourth quarter of 2011. The agreement also includes customary development-based milestone payments related to AML, myelodysplastic syndrome (MDS) and certain other indications, as well as royalties on net sales in CTI's territories.

CTI will oversee development operations and commercialization activities in its territories and Chroma will do so in the rest of the world. Subject to a funding cap of $50 million for the first three years, CTI will be responsible for 75% of development costs and Chroma for 25%.