MEI Pharma Inc. (NASDAQ: MEIP)’s efforts to develop its pipeline product pracinostat to treat acute myeloid leukemia (AML) recently received a major boost in the form of a partnership with Swiss drug company Helsinn Group.
What is it?
MEI Pharma Inc. (NASDAQ: MEIP) and Helsinn have entered a worldwide exclusive agreement regarding development and commercialization of cancer drug pracinostat. Though pracinostat is initially targeted at AML, efforts are underway to test the drug for other cancer conditions, which could significantly expand its addressable market.
It is not currently clear what amount of revenue pracinostat can generated as a treatment for AML. But Helsinn is placing a big bet on the drug. The Swiss drug company has agreed to inject $20 million in MEI Pharma to acquire worldwide rights to pracinostat.
On top of that, Helsinn has agreed to make milestone payments to MEIP that could add up to $444 million.
Near-term cash in two installments
The $20 million that Helsinn has committed to give to MEI Pharma Inc. (NASDAQ: MEIP) will be released in two installments. The first installment will be an upfront payment of $15 million. The second installment of $5 million will be released as soon as MEI Pharma treats the first patient with pracinostat in a Phase 3 trial of the drug.
Phase 3 study – MEI Pharma Inc. (NASDAQ: MEIP)
MEI Pharma Inc. (NASDAQ: MEIP)’s pracinostat is due to enter Phase 3 trial in 1Q2017 after it recently finished Phase 2 study. That means that it will not take too long for MEI Pharma to get the balance of $5 million under the near-term cash injection from Helsinn.
If the Phase 3 study succeeds and MEI Pharma launches pracinostat on the market, it would be in to receive up to $444 million in both milestones and royalty payments from its partner Helsinn.
AML affects thousands of people in the U.S. alone. Data from the National Cancer Institute shows that about 20,000 new AML cases will be diagnosed this year and nearly 10,400 people will die of the disease in 2016. Though about 25% people diagnosed with AML can survive for three or more years, the survival rate decreases as patients advance in age.
MEI Pharma Inc. (NASDAQ: MEIP)’s pracinostat is aimed at AML patients who are 75 years or older.